Presidential Instruction Number 4 of 2026 Governing the Supply Chain and Procurement Scheme for Government Rice Reserve 2026-2029

Introduction

On April 2, 2026, the President of the Republic of Indonesia issued Presidential Instruction Number 4 of 2026 on the Procurement and Management of Domestic Unhusked Rice/Rice and the Distribution of Government Rice Reserves for the Years 2026-2029 ("Inpres 4/2026"). Inpres 4/2026 governs the roles of ministries, agencies, and regional governments in the procurement and management of domestic rice, and assigns the Public Corporation Logistics Affairs Agency (Perusahaan Umum Badan Urusan Logistik, “Perum BULOG”) as the primary implementing entity supported by various parties, including businesses. Inpres 4/2026 stipulates the strengthening of the Government Rice Reserves (Cadangan Beras Pemerintah) to maintain food availability. The recitals outline the objectives to enhance national food security and achieve rice self-sufficiency, as well as to increase farmers' income.

Key Provisions

Rice Procurement, Targets, and Government Purchasing Price

The FIRST Dictum instructs ministries and agencies to support the procurement of unhusked rice and rice. The SECOND Dictum sets the domestic unhusked rice and rice procurement target for 2026 at a minimum of 4,000,000 (four million) tons of rice. The SECOND Dictum number 1 letter b sets the Government Purchasing Price (Harga Pembelian Pemerintah, “HPP”) at Rp6,500.00 (six thousand five hundred rupiah) per kilogram for Harvested Dry Unhusked Rice (Gabah Kering Panen, “GKP”) of all qualities that have reached harvest age at the farmer level.

Involvement of Business Entities and SOEs

The FIFTH Dictum number 26 letter a allows Perum BULOG to collaborate with businesses in the procurement, management, and distribution of rice in accordance with good corporate governance principles. The FIFTH Dictum number 17 letter b governs the role of the Head of the State-Owned Enterprises Regulatory Agency in coordinating other State-Owned Enterprises (SOEs) to support Perum BULOG in implementing policies for the procurement and management of domestic unhusked rice and rice, as well as the distribution of the Government Rice Reserves.

Cooperative Empowerment and Rice Milling Partnerships

The role of cooperatives is strengthened to purchase unhusked rice and distribute rice as partners of Perum BULOG, including through the Merah Putih Village/Sub-district Cooperatives (Koperasi Desa/Kelurahan Merah Putih) as stipulated in the FIFTH Dictum number 12 letter b. The Minister of Cooperatives is also instructed to encourage the enhancement of business capacity and partnerships, financing facilitation, market access, and the development of cooperative digitalization as set forth in the FIFTH Dictum number 12 letter e. In addition, partnerships between farmer groups/combined farmer groups and rice milling businesses are also encouraged to partner with Perum BULOG to support the fulfillment of the Government Rice Reserves, as stipulated in the FIFTH Dictum number 10 letter d.

The Role of the Processing Industry and Post-Harvest Technology

The processing industry plays a role in increasing the use of technology in rice milling and polishing, including post-harvest technology, as well as developing rice-based derivative products and increasing investment in the processing industry, as governed in the FIFTH Dictum number 14. Specifically, this includes:

1. Increasing the use of technology in the rice milling and polishing industry, including post-harvest technology;

2. Developing rice-based derivative products; and

3. Increasing investment in the rice processing sector.

Business Opportunities in Logistics Services, Infrastructure, and Warehouse Provision

The management of Government Rice Reserves includes inter-regional stock equalization as stipulated in the THIRD Dictum numbers 1 and 2. To support this distribution, the provision of land, sea, and air transportation facilities to ensure the smooth distribution of food is governed through the role of the Minister of Transportation in the FIFTH Dictum number 5. In terms of infrastructure, improving access to distribution roads and bridges is also part of the support set forth in the FIFTH Dictum number 6. Furthermore, Perum BULOG is tasked with collaborating with other ministries/agencies, as well as Regional Governments, for warehouse provision, as specifically governed in the FIFTH Dictum number 26 letter d. The utilization of the warehouse receipt system is also governed through the role of the Minister of Trade in the FIFTH Dictum number 11 letter b.

Rice Distribution through the General Market and Nutritional Programs

The distribution of the Government Rice Reserves also includes distribution for general market programs, as stipulated in the FOURTH Dictum number 1 letter b. Additionally, the Government Rice Reserves may be utilized for the Free Nutritious Meal program by the National Nutrition Agency (Badan Gizi Nasional), as set forth in the FIFTH Dictum number 22 letter a.

Stock Release, Legal Assistance, and Compensation

Perum BULOG may release rice stocks experiencing quality degradation through processing into derivative products or via auction, as stipulated in the FIFTH Dictum number 26 letter b. The use of an auction information system is also governed to support the implementation of such auctions in the FIFTH Dictum number 13 letter c. Legal assistance for the implementation of procurement contracts is provided by the Attorney General, as stipulated in the FIFTH Dictum number 20. Furthermore, Perum BULOG receives compensation and an assignment margin of 7% (seven percent) to support the execution of its assignment, as set forth in the FIFTH Dictum number 21 letter h.

Educational Obligations at the Producer and Consumer Levels

Ministries/agencies and Regional Governments, in accordance with their respective duties, functions, and authorities, shall conduct dissemination and education at the producer and consumer levels to support the smooth operation of domestic unhusked rice and rice procurement through to the distribution of the Government Rice Reserves, as governed in the SIXTH Dictum.

Transitional Provisions

The funding for the procurement and distribution of rice by Perum BULOG in the 2026 Fiscal Year is calculated as part of the implementation of Inpres 4/2026, as stipulated in the SEVENTH Dictum number 2. Funding and procurement targets for 2027 through 2029 will be further determined through a food sector coordination meeting in each respective current year, as set forth in the SEVENTH Dictum number 3 and the SECOND Dictum number 3. Furthermore, Ministries/agencies and Regional Governments shall implement this Presidential Instruction with full responsibility and maintain good corporate governance in accordance with the EIGHTH Dictum. Inpres 4/2026 entered into force on April 2, 2026.

Closing

Inpres 4/2026 governs the procurement, management, and distribution of the Government Rice Reserves by involving ministries, agencies, regional governments, Perum BULOG, and businesses, and sets a domestic procurement target of at least 4,000,000 (four million) tons of rice in 2026 and a Government Purchasing Price of Rp6,500.00 (six thousand five hundred rupiah) per kilogram for Harvested Dry Unhusked Rice. The involvement of businesses includes collaboration with Perum BULOG in the procurement, management, and distribution of rice. Moreover, the utilization of the warehouse receipt system is also encouraged, while the processing industry plays a role in the use of post-harvest technology, the development of rice-based derivative products, and the increase in investment. The Government Rice Reserves are also distributed through the general market and utilized for the Free Nutritious Meal program, and may be released through processing or auction in the event of quality degradation, supported by legal assistance for the implementation of procurement contracts and the provision of compensation alongside a 7% (seven percent) assignment margin to Perum BULOG. The funding for the procurement and distribution of rice in 2026 is calculated as part of the implementation of Inpres 4/2026, while the targets and funding for 2027 to 2029 will be determined through a food sector coordination meeting. Ministries/agencies as well as Regional Governments shall implement Inpres 4/2026 with full responsibility while maintaining good governance.