JAKARTA - The government is ensuring the absorption of sugar from domestic farmers by allocating a budget of IDR 1.5 trillion. The funds will be used through state-owned food companies Danantara and ID FOOD to purchase farmers' sugar at a minimum price of IDR 14,500 per kilogram, in accordance with the Reference Sales Price (HAP) set by the National Food Agency (Bapanas).
I Gusti Ketut Astawa, Deputy for Food Availability and Stability at Bapanas, stated that this absorption follows a meeting with all national sugar stakeholders in Surabaya on Friday, August 22.
"The government's absorption of farmers' sugar through Danantara has been signed, and this is one of the points of agreement that we will jointly monitor at the meeting in Surabaya with all national sugar stakeholders," Ketut said in an official statement on Monday, August 25.
Ketut outlined several agreements made during the meeting, including that the absorption of farmers' sugar would be carried out through a transparent auction mechanism managed by PT Sinergi Gula Nusantara (SGN). A minimum price of IDR 14,500 per kg must be adhered to by all parties, with no cashback practices that disadvantage farmers.
Other agreements included improving the quality of farmers' sugar to meet quality standards, a strict ban on the circulation of refined sugar in retail markets, and the National Police Food Task Force monitoring distribution and taking action against violations.
"With a transparent auction mechanism and full support from the government, sugarcane farmers should experience real benefits from their hard work, and the public should continue to receive an adequate supply of sugar at a fair price," he said.
Previously, the Secretary General of the National Leadership Council of the Indonesian Smallholder Sugarcane Farmers Association (DPN APTRI), M. Nur Khabsyin, confirmed that the disbursement of IDR 1.5 trillion from Danantara to absorb sugar from smallholder sugarcane farmers would be realized soon.
According to him, the disbursement mechanism involves funds from Danantara being channeled to state-owned sugar companies, namely PT Rajawali Nusantara Indonesia (Persero) and PT Sinergi Gula Nusantara (SGN), which then pay directly to the farmers.
In addition, the sugarcane farmers conveyed six main demands, which they had submitted to Commission IV of the Indonesian House of Representatives (DPR RI). First, the government is asked to maintain its promise to stop imports in 2025, as imports of 200,000 tons were still allowed earlier this year.
Second, tightening supervision of refined sugar distribution to prevent leakage into the consumer market. Third, the government is asked to purchase 100,000 tons of farmers' sugar currently piling up in factory warehouses through state-owned companies.
The fourth demand is a revision of Minister of Trade Regulation No. 16/2025 concerning the unconditional free import of ethanol, which is considered detrimental to farmers by lowering the price of molasses from IDR 2,500–IDR 3,000 per kg in 2024 to IDR 1,000–IDR 1,400 per kg in 2025.
Furthermore, APTRI also emphasized the importance of ensuring timely fertilizer availability to help farmers reduce production costs, as well as assistance with transportation facilities for transporting sugarcane from wetlands managed by smallholder sugarcane farmer cooperatives at each sugar factory.
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