The high price of rice amidst rumors of rice bootlegging has left traders and entrepreneurs in a state of unrest.
This is because the government's efforts to intensify law enforcement of the rice trade system from oplosan to hoarding are feared to lead to misunderstandings between stockpiled rice and current stock.
Chairman of the Indonesian Rice Millers and Rice Entrepreneurs Association (Perpadi) Sutarto Alimoeso said that a number of rice entrepreneurs are now experiencing difficulties and have decided to stop milling rice.
"Fears of oplosan rice inspection also add to the hesitation of entrepreneurs (to operate) because of the risk of being questioned in the midst of a situation where production prices are not balanced with selling prices," Sutarto told SUAR in Jakarta, Wednesday (14/8).
Rice prices in Indonesia have continued to rise, reaching historic highs.
Based on data from the National Food Agency (Bapanas), the price of premium rice has reached Rp 15,622 per kilogram, while medium rice has reached Rp 13,860 per kilogram.
The price has exceeded the highest retail price (HET) set by the government, which is Rp 14,900 per kilogram for premium rice and Rp 12,500 per kilogram for medium rice.
Sutarto explained that the non-operation of some rice mills in Indonesia is very complex and not caused by one single factor.
Some of the contributing factors include the imbalance between production capacity and the availability of raw materials, to entrepreneurs' concerns regarding regulations and market competition.
"Actually, if rice mills are not operating, there is not just one reason. One of them is because the number of rice mills in Indonesia currently reaches more than 169,000 units, while the availability of grain is far below the installed capacity," he said.
He added that the available grain is only about 54 million tons of milled dry grain (MDG), or far below the available milling production capacity of more than 200 million tons.
According to him, this condition naturally triggers another factor, namely, the existence of intense competition, causing some rice mills to not be able to operate optimally.
"With such a situation, there will definitely be competition. Competition will happen at some point, there will be those who do not operate," he said.
Sutarto also outlined other problems arising from the price policy. He explained that the increase in the government purchase price (HPP) of unhulled rice to IDR 6,500 per kilogram was not matched by an increase in the highest retail price (HET) of rice. This creates a dilemma for entrepreneurs, especially small-scale ones.
"But the highest retail price (HET) did not go up. This is a dilemma for entrepreneurs, especially the small ones, who will not be able to produce at prices above Rp 6,500," he said.
Review the price ceiling
Sutarto offered a number of solutions that can be taken by the government and businesses.
First, the government needs to immediately review the price ceiling. Second, he asked the government not to increase market pressure by buying grain or rice when production is low, such as in June, July, and August.
On the business side, he cautioned against cheating. According to him, one cheat can have a negative impact on the entire rice milling ecosystem.
"If one (entrepreneur) commits fraud, it will affect other rice mills, then problems occur. So it is not only consumers who are affected, but also other rice mills," he said.
For a long-term solution, he emphasized the importance of collaboration and synergy. He proposed that rice mills should collaborate with local farmers.
"It is time for the rice mill to make a good plan, which is to cooperate with farmers. Thus, grain can be sold directly from farmers to local rice mills, without going through intermediaries, which will create efficiency," he said.
Sutarto also emphasized the importance of cooperation between small rice mills and those with medium and large capacity. He emphasized that small rice mills should not be shut down. Instead, they should be harmonized with medium and large ones.
"During the big harvest, small rice mills can produce broken rice or rice with substandard quality and supply it to medium and large rice mills," he explained.
Thus, medium and large rice mills will play a role in final processing and inter-island or inter-regional distribution. This cooperation creates a fair division of profits, according to Sutarto.
"So, we hope that the grain will not need to move between regions. It needs to be dried, processed on the spot, enter a small rice mill, and then enter a large rice mill to be distributed to other areas," he explained.
With this initiative, he hopes that grain will no longer need to move between regions, thus creating a more comfortable and stable rice industry ecosystem for all parties. Starting from farmers, millers, distributors, to consumers.
Meanwhile, Chairman of the Indonesian Association of Seed Banks and Tani Technology (AB2TI), Dwi Andreas, also highlighted the pressure faced by rice millers due to government intervention in grain prices.
According to him, the increase in the government purchase price (HPP) is not proportional to the highest retail price (HET) set.
"On the big issue side, the price of grain was raised from Rp 6,000 to Rp 6,500. But it is not followed by an increase in the price ceiling, of course it is very burdensome for the millers. Because for Rp 6,500 grain alone, the production cost per kilogram of medium rice is already Rp 13,808," he told SUAR (14/8/2025).
Dwi Andreas proposes a concrete solution to this problem, which is to raise the price ceiling on rice. However, he suggested that the price ceiling should only apply to medium rice consumed by the general public. Meanwhile, for premium rice, he suggested that the price be left to the market mechanism.
"If the government wants to protect consumers, setting the price ceiling for medium rice is enough, because premium rice consumers are a specific group and the number is not too large. Thus, the market mechanism will run by itself and actually improve without intervention," he said.
No need to worry
In response, the Head of the National Food Agency (Bapanas), Arief Prasetyo Adi, ensured that the government has taken concrete steps to maintain stability and that rice millers and rice entrepreneurs need not worry as long as they comply with the applicable rules.
"There is no need to worry about activities in the rice business as long as they (entrepreneurs) all follow the rules. If it is premium rice, then the broken content should not exceed 15%. In addition, the weight of the packaging must match what is stated," he told SUAR (14/8/2025).
The Head of Bapanas also emphasized that the government will not tolerate fraudulent practices, such as deceiving consumers by selling medium rice in premium packaging. "If entrepreneurs commit fraudulent acts, yes, we must enforce it, we must straighten it out," he said.
He urged traders not to pull the rice from the shelves, but to adjust the price to the quality of the rice inside, as a form of protection for consumers.
Previously, the government planned to revise the quality policy to the highest retail price (HET) of rice. This revision will remove the provision of two qualities of premium and medium rice, making it one standard and one HET.
However, Dwi Andreas rejects the proposal to eliminate the classification of medium and premium rice. According to him, the policy is a big mistake because it denies the development of existing technology in the rice industry.
"Because it denies the development of existing technology. If rice classification is removed, it will hamper producers' efforts to improve rice quality and reduce loss or damage," he explains.
He explained that technology such as color sorter plays an important role in separating rice based on color and size, resulting in high-quality rice with a longer shelf life.
In closing, Dwi Andreas emphasized that the government must choose whether to protect farmers by raising grain prices, or protect consumers by keeping rice prices low.
