Indonesian Minister of Agriculture Andi Amran Sulaiman confirmed on Wednesday that organized illicit practices are driving domestic rice price inflation despite a national stockpile of 4.5 million tons.
Authorities have arrested 36 suspects over the past two weeks for manipulating subsidized rice supplies and selling counterfeit fortified products.
- Supply Chain Sabotage: Operators are systematically dismantling the government’s Stabilisasi Pasokan dan Harga Pangan (SPHP) program to repackage affordable rice as premium-grade product.
- Regulatory Lockdown: The government has initiated a moratorium on new fortified rice production licenses, as 25 of 27 brands currently in the market failed to meet mandatory quality and safety standards.
- Financial Enforcement: Producers found in violation face severe penalties, including license revocation, potential seven-year prison sentences, and fines reaching Rp 1,5 miliar per offense.
The discrepancy between government-mandated price caps and retail reality is rooted in the subversion of the SPHP program. According to Amran, illicit actors are purchasing low-cost SPHP rice and rebranding it as premium, allowing them to capture the margin spread. This practice persists even as the government maintains a rice stock of 4.5 million tons, as reported by Kompas.
The fraud extends into the “fortified” rice market, where products intended to retail for Rp 13,000 per kilogram are being sold to consumers for as much as Rp 50,000 per kilogram. “Fortifikasi, harganya harusnya Rp 13 ribu dijual Rp 50 ribu. Kemudian oplos, beras SPHP dibongkar kemudian dia jual jadi premium,” Indonesian Minister of Agriculture Andi Amran Sulaiman stated at the Coordinating Ministry for Food Affairs in Jakarta on Wednesday.
/data/photo/2026/10/28/6ae1948e0ec82.jpeg "Photo: Kompas")
The official data from the Badan Pusat Statistik (BPS) confirms a persistent upward trend in rice costs across the distribution chain as of October 2026.
| Level | Monthly Increase | Year-on-Year Increase |
|---|---|---|
| Milling | naik 0,26 persen | mencapai 6,89 persen |
| Wholesale | mengalami inflasi 0,01 persen | 5,13 persen |
| Retail | naik 0,08 persen | 4,10 persen |
The crackdown is being led by a newly formed Satgas Pengawasan Beras Terpadu, a joint task force comprising internal Bulog auditors and the national police’s food task force. Ahmad Rizal Ramdhani, Director of Perum Bulog, said that his office has already terminated cooperation with five Rumah Pangan Kita (RPK) outlets in Jakarta that were caught violating distribution protocols, as reported by ANTARA News Jambi.
The Ministry of Agriculture has also established a public reporting channel, “Lapor Pak Amran,” which has already logged 370 complaints regarding food sector irregularities.
Andriko Noto Susanto, Deputy for Food Consumption Diversification and Security at the National Food Agency (Bapanas), said that the moratorium on fortified rice will remain in place until the governance of the sector is fully overhauled. “Dari 27 merek dagang itu 25 tidak memenuhi syarat terkait dengan beras fortifikasi,” Susanto told CNBC Indonesia.
While the government expects year-end stockpiles to reach estimated highest levels, the effectiveness of these arrests in curbing inflation remains an open question for market observers. With 33 countries currently restricting food exports, Indonesia is attempting to insulate its domestic supply from global volatility. “Sekarang ini kondisi dunia memang lagi menahan bahan baku, atau beras yaitu 33 negara,” Amran said on Wednesday.
The Ministry of Agriculture continues to process the 370 reports received via the public channel, and officials confirmed they are investigating production facilities in regions such as North Sumatra.
