In the 2026 Draft State Budget (APBN), the budget for the Free Nutritious Meal (MBG) program increased to Rp 355 trillion, a 400% surge compared to the 2025 budget of only Rp 71 trillion. This could be an opportunity and a challenge for business actors.

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

Dadan Hindayana said that the purchase of food ingredients is done directly, so the absorption of local products is faster and drives the regional economy.

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

Great opportunity for UMKM, challenge for local industry

How are business actors involved in this program? The General Chair of the Indonesian Meat Processing Industry Association or National Meat Processors Association Indonesia (Nampa), Ishana Mahisa, explained that Nampa as an association of large producers is not directly involved in the MBG program.

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

“The catering companies are the ones who buy from our partner retailers. We (manufacturers) cannot directly sell to consumers or end users. There will be competition, and the retailers will be angry,” she explained to SUAR (20/8/2025).

According to her, the increase in the 2026 MBG budget will increase meat consumption, but not significantly, because the budgeting in the MBG program is small. The value is only Rp 10,000 per serving.

“My estimate is that meat consumption will increase but it will be small, because the food cost is Rp 10,000, then reduced by the margin, reduced by other things, maybe Rp 6,000, so the portion of meat is small. Red meat alone is now Rp 88,000 per kg,” she explained.

Deputy for Micro Business at the Ministry of UMKM Riza Damanik stated that MBG is an ecosystem that provides dual benefits. Namely, not only does it guarantee nutritional intake for children, but it also opens economic doors for millions of UMKM actors.

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

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

He cited one example of the success of the MBG program on the UMKM economy in Pamulang, South Tangerang. In this area, a vegetable supplier for four MBG kitchens has succeeded in creating jobs for 15 housewives.

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

To overcome this, the Ministry of UMKM launched an online mentoring program attended by 1,000 UMKM. This program includes socialization, training, curation, business matching, and financing assistance.

The latest BGN data records that the MBG program has reached more than 20.5 million beneficiaries through 5,885 SPPG spread across 38 provinces, 502 regencies, 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 business actors can participate in.

Robert Sutanto, an entrepreneur who is a member of the Indonesian Food Container Manufacturers Association (Apmaki), also stated that initially local tray producers were optimistic about the addition of the MBG program budget. However, local producers are now pessimistic after imported trays, especially from China, have been widely circulated even before import relaxation regulations were implemented.

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

"It seems we are pessimistic because we, the local producers, cannot participate, as the opportunity is taken by food tray importers," said Robert.

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

Previously, on June 30, 2025, the Ministry of Trade (Kemendag) issued Minister of Trade Regulation Number 22 of 2025, which will take effect on August 29, 2025. The policy facilitates imports for trays (food tray) which are included in the 10 commodities that receive exemptions. 

Robert Susanto stated that the total production of food tray based on Apmaki data is now more than 10 million sets. However, only around 4 million–5 million are absorbed by MBG's kitchen partners, and the rest becomes 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, consumer nationalism can grow, and local industries can survive," he said.

Suboptimal multiplier effect

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

Yusuf highlighted that the realization of the MBG program has not been able to provide a multiplier effect on the economy. Until the first semester of this year, the realization of the program budget is still relatively small. This is also due to the not-yet-permanent involvement of micro, small, and medium enterprises (UMKM) in the food supply chain.

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

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

Yusuf exemplified that the government must ensure that programs such as the creation of new rice fields and agricultural subsidy policies run according to target and are not hampered by structural problems.

"Don't let our agricultural policies contradict or not align with what is conveyed by experts in agriculture, for example, I'll take the example of food estate," said Yusuf, highlighting the importance of evaluating agricultural policies so that they align with the goals of the MBG program.

He reminded that the increase in the budget 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 goal is for this program to be truly effective and provide broad benefits to the community.