Facilitating Private Partnerships and Streamlining the National Corn Supply Chain through Presidential Instruction Number 3 of 2026

Introduction

On March 25, 2026, the Government issued Presidential Instruction Number 3 of 2026 on the Procurement and Management of Domestic Corn and the Distribution of Government Corn Reserves for 2026 to 2029 ("Inpres 3/2026"). Inpres 3/2026 governs the coordination among ministries, agencies, and regional governments in implementing the procurement, management, and distribution of government corn reserves nationally. 

Inpres 3/2026 stipulates the strengthening of Government Corn Reserves to support national food security and corn self-sufficiency targets. According to the recitals, Inpres 3/2026 also aims to enhance farmers' welfare and income. Its implementation involves ministries, agencies, and regional governments, and creates partnership opportunities for businesses, including the processing, transportation, and warehousing sectors.

Key Provisions

Procurement Targets and Determination of Government Purchasing Prices

The Government sets the procurement volume and corn purchasing prices as a reference for businesses. Under the SECOND Dictum, the target for domestic dry shelled corn procurement is at least 1,000,000 (one million) tons for 2026, while the targets for 2027 to 2029 will be determined through coordination meetings. The SECOND Dictum also sets the Government Purchasing Price (Harga Pembelian Pemerintah, “HPP”) for dry shelled corn at the farmer level at Rp5,500.00 (five thousand five hundred rupiah) per kilogram, with a moisture content between 18% (eighteen percent) and 20% (twenty percent).

Management and Distribution by Perum BULOG

Public Corporation (Perusahaan Umum, “Perum”) BULOG manages Government Corn Reserves. Under the THIRD Dictum, Perum BULOG manages storage, maintenance, inter-regional stock balancing, processing, and stock release to maintain corn quality and availability. The FOURTH Dictum authorizes Perum BULOG to distribute corn through general and special market operations. This distribution aims to fulfill feed corn demands for independent farmers and support raw material supplies for the animal feed industry.

Partnership Opportunities for Businesses, Cooperatives, and the Industrial Sector

The Government involves businesses, cooperatives, and the industrial sector in corn procurement and distribution. Under the FIFTH Dictum, partnership arrangements include:

1. The Minister of Agriculture encourages partnerships between farmer groups or combined farmer groups and corn drying facility entrepreneurs to partner with Perum BULOG, and facilitates harvesting and post-harvesting facilities.

2. The Minister of Cooperatives facilitates the Merah Putih Village/Sub-district Cooperatives and other cooperative business networks as corn distributors and off-takers, including market access, financing, and digitalization.

3. The Minister of Industry enhances the involvement of the animal feed and corn processing industries, including investment development, downstreaming, and post-harvest technology implementation.

Logistic Infrastructure Support and Utilization of the Warehouse Receipt System

The implementation of Inpres 3/2026 involves the logistics and warehouse management sectors. Under the FIFTH Dictum, the Minister of Transportation provides transportation means and supporting infrastructure for inter-regional corn distribution. The Minister of Public Works enhances road and bridge access to support food distribution. Additionally, the FIFTH Dictum tasks the Minister of Trade with encouraging the utilization of the Warehouse Receipt System (Sistem Resi Gudang) by Perum BULOG in domestic corn procurement.

Quality Standards, Price Transparency, and Dissemination Obligations

Business entities partnering with the government must comply with the stipulated technical standards. Under the FIFTH Dictum, the Head of the National Food Agency (Badan Pangan Nasional, “Bapanas”) formulates technical implementation guidelines, drafts the purchasing price cost structure and the compensation and margin mechanisms for Perum BULOG in coordination with the Ministry of Finance, and determines the Government Purchasing Price and the quality standards of Government Corn Reserves following decisions made in food sector coordination meetings. The SIXTH Dictum obligates ministries, agencies, and regional governments to conduct dissemination and education for corn producers and businesses regarding quality standards and procurement mechanisms.

Funding, Auctions, and Contract Legal Assistance

The FIFTH Dictum tasks the Minister of Finance with facilitating funding, including the provision of an auction information system that businesses can utilize to absorb the release of Government Corn Reserves that have experienced quality degradation, and tasks the Attorney General with providing legal assistance in procurement, management, and distribution contracts, while the Head of the Finance and Development Supervisory Agency (Badan Pengawasan Keuangan dan Pembangunan, “BPKP”) reviews prices and costs in the implementation of Inpres 3/2026.

Supply Chain Security, Warehouse Utilization, and SOE Synergy

The FIFTH Dictum tasks the Commander of the Indonesian National Armed Forces (TNI) and the Chief of the Indonesian National Police (Kapolri) with providing security and assistance in corn absorption and supporting the inventory and utilization of warehouses for food storage, as well as tasking the Minister of Defense with supporting national resilience aspects. Furthermore, the Head of the State-Owned Enterprises Regulatory Agency coordinates other State-Owned Enterprises (SOEs) to support Perum BULOG in implementing domestic corn procurement and management policies, as well as distributing the Government Corn Reserves.

Central Coordination, Statistical Data, and Regional Roles

The FIFTH Dictum tasks the Coordinating Minister for Food Affairs, the Coordinating Minister for Economic Affairs, and the Head of the National Development Planning Agency (Badan Perencanaan Pembangunan Nasional, “Bappenas”) with aligning policies with the Government Work Plan and macroeconomic policies, and tasks the Head of Statistics Indonesia (Badan Pusat Statistik, “BPS”) with providing monthly corn production data and corn conversion survey results at least twice a year at the provincial level, while the Minister of Home Affairs, alongside governors and regents/mayors, accelerates regional warehouse utilization and enhances infrastructure to support regional food distribution.

Transitional Provisions

The SEVENTH Dictum stipulates that financing for the procurement and management of Government Corn Reserves in 2026 is sourced from the State Budget (Anggaran Pendapatan dan Belanja Negara, “APBN”), Regional Budgets (Anggaran Pendapatan dan Belanja Daerah, “APBD”), and other legitimate sources as an integral part of implementing Inpres 3/2026. Financing for 2027 to 2029 will be further determined through food sector coordination meetings.

Closing

Inpres 3/2026 governs the procurement, management, and distribution of Government Corn Reserves nationally through cross-ministerial, agency, and regional government coordination. Inpres 3/2026 sets the domestic dry shelled corn procurement target at a minimum of 1,000,000 (one million) tons for 2026 with a Government Purchasing Price of Rp5,500.00 per kilogram, and tasks Perum BULOG with managing and distributing Government Corn Reserves. Inpres 3/2026 also involves businesses, cooperatives, and the industry in corn procurement and distribution partnerships, with logistical infrastructure support, Warehouse Receipt System utilization, as well as the provision of funding and auction mechanisms. Additionally, Inpres 3/2026 governs quality standards, the formulation of technical guidelines, and dissemination obligations, along with the assignment of legal assistance and price and cost reviews during its implementation. Financing for 2026 is sourced from the State Budget, Regional Budgets, and other legitimate sources, whereas funding for 2027 to 2029 will be further determined through food sector coordination meetings. In its implementation, businesses must comply with the stipulated quality standards, including corn moisture content, and observe compliance aspects in procurement, management, and distribution activities.