National Food Agency Regulation Number 2 of 2026 Governs the Administration of Government Rice Reserves

Introduction

On 4 March 2026, the National Food Agency issued National Food Agency Regulation Number 2 of 2026 on the Administration of Government Rice Reserves (“Regulation 2/2026”), which took effect on 11 March 2026. This regulation aims to strengthen and reorganize the governance of the administration of Government Rice Reserves (CBP) from upstream to downstream, covering procurement, management, and distribution mechanisms.

Regulation 2/2026 ensures the equitable availability of staple food supplies throughout the entire territory of the Unitary State of the Republic of Indonesia, reduces vulnerability during times of crisis, and accelerates the realization of the national rice self-sufficiency target. Achieving this objective requires efficient stock rotation management across regions and over time.

 

Comparison

Regulation 2/2026 revokes National Food Agency Regulation Number 12 of 2022 on the Administration of Government Rice Reserves (“Regulation 12/2022”). The following table presents a comparison between Regulation 2/2026 and Regulation 12/2022:

 

Key Provisions

Mechanism for Rice Absorption and Procurement

According to Article 9, the National Food Agency requires Perum BULOG to prioritize the absorption of unhusked rice and rice derived from domestic production. The Government, through the Head of the Agency, determines the Government Purchasing Price (“HPP”) as the standard purchase price at the producer level. Article 10 paragraph (2) provides flexibility for the Government to increase the purchase price for a certain period if the average local market price exceeds the HPP. Furthermore, Article 12 allows import procurement from abroad only if domestic absorption from farmers is insufficient to meet reserve requirements and fails to control price volatility in the domestic market.

Stock Management and Release Strategy

Article 14 requires Perum BULOG to manage reserve stocks through a dynamic stock rotation mechanism and the use of storage technology to maintain rice quality and prevent deterioration. Pursuant to Article 15, if rice experiences a decline in quality due to prolonged storage or as a result of a disaster (force majeure), the rice reserves with reduced quality may be released. The forms of release are regulated in Articles 19 and 20, whereby managers may process the release of Government rice reserves upon approval from the Head of the National Food Agency through safeguarding schemes, including:

1. Sale (including sale as animal feed if it is no longer suitable for human consumption);
2. Reprocessing to improve quality;
3. Stock exchange by taking price refraction into account; and/or
4. Grants based on an assignment from the Central Government.

Distribution Structure and Market Operations

Article 24 details and expands the scope of rice distribution strategies to control inflation by dividing market intervention into two instruments, namely General Market Operations and Special Market Operations. According to Article 25, General Market Operations are conducted throughout the year to distribute premium and medium rice to individual consumers, distributors, electronic retail store networks, and state officials (ASN, TNI, Polri). In contrast, Special Market Operations distribute subsidized rice directly to vulnerable community groups, with distribution locations determined by the Central Government.

 

Closing

Regulation 2/2026 replaces Regulation 12/2022 in order to reorganize the governance of Government Rice Reserves (CBP) from procurement to distribution and to ensure equitable supply while achieving national self-sufficiency. This regulation prioritizes food security based on domestic production by emphasizing the absorption of local unhusked rice through the flexibility of the HPP, positioning imports only as a last alternative, while also ensuring compensation for the operational costs incurred by Perum BULOG. To maintain quality, stock management is optimized through storage time limits, dynamic stock rotation, and safeguarding schemes for rice with reduced quality, which are subsequently distributed through General Market Operations as a large-scale instrument for inflation control and Special Market Operations targeting vulnerable community groups.