In the 2026 Draft State Budget (APBN), the budget for the Free Nutritious Meal (MBG) program rose to IDR 355 trillion, a 400% increase compared to the 2025 budget of only IDR 71 trillion. This can be an opportunity and a challenge for businesses.

Head of the National Nutrition Agency (BGN) Dadan Hindayana stated that the budget was set because the Free Nutritious Food Program (MBG) in 2026 will reach 82.9 million people. With that many recipients, he estimates that the program will spend around Rp 1.2 trillion every day.

Dadan Hindayana said that food purchases are made directly, so that the absorption of local products becomes faster and also drives the regional economy.

"One SPPG (nutrition service unit) will manage approximately IDR 10 billion per year, 85 percent of which is used to buy raw materials. And, 95 percent of the raw materials are agricultural. So, this program is actually in line with self-sufficiency and food security," said Dadan in an official statement, Thursday (14/8). 

Big opportunities for UMKM, challenges for local industries

How is the involvement of business actors in this program? National Meat Processors Association Indonesia (Nampa) Chairman Ishana Mahisa explained that Nampa, as an association of large producers, is not directly involved in the MBG program.

However, he added, the involvement of the meat processing industry occurs through their partners. Namely, retailers who sell processed meat products to parties collaborating with the program, such as caterers or foundations.

"The caterers are the ones who buy from our partner retailers. We (manufacturers) cannot directly sell to direct consumers or end users. Later competition, right, will upset the retailers," he explained to SUAR (20/8/2025).

According to him, the increase in the 2026 MBG budget has increased meat consumption, but not significantly, because the budget in the MBG program is small. The value is only IDR 10,000 per serving.

"My estimate is that meat consumption has increased but it is small, because the food cost is Rp 10,000, then reduced by margins, reduced by others, maybe Rp 6,000, so the meat portion is small. Red meat alone is now IDR 88,000 per kg," he explained.

Riza Damanik, Deputy for Micro Business of the Ministry of UMKM , said that MBG is an ecosystem that provides multiple benefits. Namely, not only ensuring the nutritional intake of children, but also opening economic doors for millions of UMKM players.

"Of the total MBG budget, 85% is allocated for the procurement of kitchen raw materials, ranging from vegetables, livestock products, fisheries, to plantations. This is a great opportunity for 29 million food sector UMKM , especially those in rural areas, to grow and develop," Riza said in an official statement in Jakarta, Wednesday (13/8).

Riza said there are already 6,435 UMKM that are part of the MBG supply chain. Namely, from raw material suppliers such as farmers, fishermen, and market traders, to catering providers and food waste processors into products of economic value, such as fertilizer and fish feed.

He gave an example of one of the successes of the MBG program on the UMKM economy in Pamulang, South Tangerang. In this area, a vegetable supplier for four MBG kitchens has created jobs for 15 housewives.

However, Riza also acknowledged the challenges for UMKM. For example, difficulties in maintaining quality standards, quantity and sustainable supply. In addition, there is the issue of lack of technical information and limited access to capital.

To overcome this, the Ministry of UMKM launched an online mentoring program in which 1,000 UMKM participated. The program includes socialization, training, curation, business matchmaking, and financing assistance.

The latest BGN data notes that the MBG program has reached more than 20.5 million beneficiaries through 5,885 SPPGs spread across 38 provinces, 502 districts, and 4,770 sub-districts throughout Indonesia. Each SPPG serves an average of 3,500 people.

Judging from the scale of the activity, it seems that there are many opportunities that can be tasted by business people.

Robert Sutanto, an entrepreneur who is a member of the Indonesian Food Container Manufacturers Association (Apmaki), also stated that initially local tray manufacturers were optimistic regarding the additional budget for the MBG program. However, local manufacturers are now pessimistic after imported trays, especially from China, were widely circulated even before the import relaxation regulation was enacted.

"We should be optimistic about the increase in the MBG budget due to increased demand. But it seems we are pessimistic because we local producers cannot play a role, because the opportunity is taken by food tray importers," he said.

"It seems that we are pessimistic because we local producers cannot play a role, because the opportunity is taken by food tray importers," said Robert.

"Currently, imported products have flooded the country," he told SUAR (19/8/2025).

Previously, on June 30, 2025, the Ministry of Trade (MOT) issued Minister of Trade Regulation No. 22 of 2025 which will take effect on August 29, 2025. The policy eases imports forfood trays which are included in the 10 commodities that receive concessions. 

Robert Susanto stated that currently the total production of food trays based on Apmaki data is more than 10 million sets. But those absorbed by MBG kitchen partners are only around 4 million-5 million, and the rest become unsold stock.

He hopes that the government can take steps to create healthy competition so that local products get protection, so that MBG kitchens can still choose domestic products. "That way, the spirit of consumer nationalism can grow, and the local industry can survive," he said.

Suboptimal double effect

Economist at the Center of Reform on Economics (CORE) Indonesia, Yusuf Rendy Manilet, argues that the budget increase for the Free Meal Program (MBG) faces a number of challenges. One of them is that it does not provide amultiplier effect for the economy.

Yusuf highlighted the realization of the MBG program, which is considered unable to provide a multiplier effect on the economy. Until the first semester of this year, the budget realization of this program was still relatively small. This is also due to the lack of permanent involvement of micro, small and medium enterprisesUMKM) in the food supply chain.

"If you want to provide a multiplier effect to the economy, these canteens are deployed by the government to run the MBG program. So by including canteens in this program, this program can finally have a wider effect," he explained.

According to him, the MBG program should benefit the agriculture, livestock and fisheries sectors. However, this can only happen if the program has a comprehensive blue print , so that its scope can be broader and integrated with these various sectors.

Yusuf pointed out that the government must ensure that programs such as the creation of new paddy fields and agricultural subsidy policies are on target and not hampered by structural problems.

"We should not let our agricultural policies contradict or not be in accordance with what is delivered by experts in agriculture, for example I take the example of food estate," Yusuf said, highlighting the importance of evaluating agricultural policies to be in line with the objectives of the MBG program.

He reminded that the budget increase must be a momentum for comprehensive improvement, starting from the formulation of the menu, the involvement of UMKM, to policies in the agricultural and livestock sectors. The target is for this program to be truly effective and provide broad benefits to the community.