The government plans a massive expansion of its flagship Free Nutritious Meal program (MBG) in 2026, with spending set to jump 400% year-on-year to IDR 355 trillion ($22 billion), making it one of the country’s largest social initiatives.

The program, a central policy priority of President Prabowo Subianto, will provide meals for 82.9 million beneficiaries, mostly schoolchildren. According to the National Nutrition Agency (BGN), this will require daily spending of IDR 1.2 trillion ($75 million) on food, much of it sourced locally.

Dadan Hindayana mentioned that the purchase of food ingredients is done directly, which accelerates the absorption of local products and also stimulates the regional economy.
“One SPPG (nutrition fulfillment service unit) will manage approximately IDR 10 billion per year, with 85% of it used to buy raw materials. And 95% of these raw materials come from agriculture. So, this program is actually in line with self-sufficiency and food security,” said Dadan in an official statement on Thursday (August 14).

Big Opportunities for MSMEs, Challenges for Local Industries

How are businesses involved in this program? Ishana Mahisa, Chairperson of the Indonesian Meat Processing Industry Association (Nampa), 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 catering services or foundations.
“The caterers are the ones who buy from our partner retailers. We (manufacturers) cannot sell directly to consumers or end users. Otherwise, it would create competition and upset the retailers,” he explained to SUAR (August 20, 2025).

According to him, the increase in the MBG 2026 budget will raise meat consumption, but not significantly, because the allocation per meal in the MBG program is small—only IDR 10,000 per portion.

Deputy for Micro Enterprises at the Ministry of UMKM, Riza Damanik, stated that the MBG program is an ecosystem that provides dual benefits. It not only ensures children’s nutritional intake but also opens economic opportunities for millions of MSME actors.

“Of the total MBG budget, 85% is allocated for the procurement of kitchen raw materials, ranging from vegetables, livestock, fisheries, to plantation products. This is a huge opportunity for 29 million food-sector MSMEs, especially those in rural areas, to grow and develop,” said Riza in an official statement in Jakarta, Wednesday (August 13).

Riza mentioned that 6,435 MSMEs are already part of the MBG supply chain, from raw material suppliers such as farmers, fishermen, and market traders, to catering providers and food waste processors turning waste into economically valuable products, such as fertilizer and fish feed.

He cited an example of the MBG program’s impact on MSME economic growth in Pamulang, South Tangerang. In this area, a vegetable supplier for four MBG kitchens managed to create jobs for 15 housewives.

However, Riza also acknowledged the challenges faced by MSMEs, such as difficulties in maintaining quality standards, quantity, and sustainable supply. In addition, there are issues with limited technical information and restricted access to capital.

To address these challenges, the Ministry of UMKM launched an online mentoring program involving 1,000 MSMEs. The program includes socialization, training, curation, business matchmaking, and financial assistance.

The latest data from the National Nutrition Agency (BGN) records that the MBG program has reached more than 20.5 million beneficiaries through 5,885 SPPGs spread across 38 provinces, 502 regencies, and 4,770 districts throughout Indonesia. Each SPPG serves an average of 3,500 people.

Given the scale of these activities, there seem to be many opportunities for businesses to participate.

Robert Sutanto, an entrepreneur affiliated with the Indonesian Food Tray Producers Association (Apmaki), stated that initially, local tray producers were optimistic about the increase in the MBG program budget. However, local producers are now pessimistic as imported trays, especially from China, have already circulated widely even before the import relaxation regulations were implemented.

“We should be optimistic with the MBG budget increase due to higher demand. However, it seems we are pessimistic because we, the local producers, cannot participate, as the opportunities have been taken by food tray importers,” he explained.

“It seems we are pessimistic because we, the local producers, cannot play a role, as the opportunities have been taken by food tray importers,” said Robert.

“Currently, these imported products have already flooded the domestic market,” he told SUAR (August 19, 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. This policy facilitates the import of trays (food trays), which are among the 10 commodities granted import relaxation.

Robert Susanto stated that the total production of food trays, based on Apmaki data, has now exceeded 10 million sets. However, only around 4–5 million sets have been absorbed by MBG kitchen partners, with the rest remaining as unsold stock.

He hopes the government can take measures to create healthy competition so that local products receive protection, allowing MBG kitchens to still choose domestic products. “In this way, consumer nationalism can grow, and the local industry can survive,” he said.

Double Benefits That Are Not Yet Fully Realized

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

Yusuf highlighted that the MBG program’s implementation has not been able to generate a strong economic multiplier effect. As of the first semester of this year, the program’s budget realization remains relatively small. This is also due to the lack of permanent involvement of micro, small, and medium enterprises (MSMEs) in the food supply chain.

“If the goal is to generate a multiplier effect for the economy, the canteens mobilized by the government to implement the MBG program should be included. By integrating canteens into this program, it can ultimately provide a broader economic impact,” he explained.

According to him, the MBG program should benefit the agriculture, livestock, and fisheries sectors. However, this can only be achieved if the program has a comprehensive blueprint, allowing its scope to be broader and integrated with these various sectors.

Yusuf gave an example, stating that the government must ensure programs such as the creation of new rice fields and agricultural subsidy policies run according to target and are not hindered by structural issues.

“Policies in agriculture should not conflict with or deviate from what experts recommend—for example, take the food estate program,” Yusuf said, highlighting the importance of evaluating agricultural policies to align with the MBG program’s objectives.

He reminded that the budget increase should serve as a momentum for comprehensive improvements, from menu formulation and MSME involvement to policies in the agriculture and livestock sectors, with the aim of making the program truly effective and broadly beneficial for society.