The Indonesian Ombudsman Asks For Badanas To Revoke The Rice HET, This Is The Reason

Illustration (Photo: Doc. Antara)

JAKARTA - The Indonesian Ombudsman asked the National Food Agency (Bapanas) to revoke the High Retail Price (HET) policy for medium and premium rice temporarily in order to optimize the supply of rice in safe markets and reduce rice prices.

Member of the Indonesian Ombudsman, Yeka Hendra Fatika, assessed that HET for rice was not effective in maintaining rice price stability.

"The Ombudsman proposed that Bapanas temporarily revoke the rice HET policy, in order to optimize the supply of rice in the market. Furthermore, regular evaluation and monitoring will be carried out on the effectiveness of the repeal of the rice HET policy," said Yeka in his written statement, quoted Tuesday, September 19.

Yeka believes that the problem with the continued increase in rice is due to the supply of rice, one of which is caused by the high price of grain. Therefore, he said, the Ombudsman proposed that Bapanas create a HET policy for grain at the rice mill level, in order to control the price of grain at the farmer level.

"If in the mitigation carried out by the government there are indications that the price of grain will continue to rise uncontrollably, the Ombudsman proposes to immediately create a HET for grain at the rice mill level. So, the price of grain can be better controlled," he said.

Note that the application of HET for grain needs to be evaluated every week. Yeka said, if the price of grain is under control, the HET for grain can be considered to be removed. The formulation of grain HET policies must also consider production components at the farmer level.

He said that currently the price of grain reaches IDR 6,500-7,300 per kilogram. If it continues to increase, Yeka believes it is easier for the government to control the HET of grain at rice mills than to control the HET of rice in the market.

The HET for zone 1 medium rice reaches IDR 10,900, for zone 2 IDR 11,500, for zone 3 IDR 11,800. Then, for premium rice HET, zone 1 is IDR 13,900, zone 2 IDR 14,400, and zone 3 IDR 14,800.

Meanwhile, currently the price of premium rice based on Bapanas data reaches IDR 14,270, while the Ministry of Trade's SP2KP data is IDR 14,555.

There was a price increase of around 14.34-15.26 percent based on a price comparison between September 2022 and September 2023.

So, Yeka believes that the HET rice policy is less effective in reducing rice prices because the current price of rice on the market has exceeded the HET.

According to him, supervision of rice HET is also less effective.

Apart from that, said Yeka, the Ombudsman also proposed that Bapanas create a policy limiting the circulation of harvested dry grain (GKP) and milled dry grain (GKG) across provinces. "So, we can measure the availability of grain stocks in each region," he concluded.