Amran Exposes New Rice Mafia Modus Operandi Exploiting Government Subsidies
The Minister of Agriculture, Amran Sulaiman, has uncovered alleged irregularities in the sale of fortified rice, which he claims not only harms consumers but also defrauds the state by exploiting various government subsidies allocated to the food sector. Amran noted that the entire rice production chain in Indonesia receives government support, including subsidies for fertiliser, irrigation, seeds, electricity, and fuel. The total value of subsidies for the food sector is projected to reach Rp160 trillion by 2026.
According to Amran, the alleged malpractice occurs when rice that has benefited from these subsidies is sold under the claim of being ‘fortified’, yet laboratory tests reveal the products do not meet fortification standards. Furthermore, these products are being sold at much higher prices than they should be. He emphasised that these practices are not only detrimental to the public but also constitute an abuse of state subsidies.
“These subsidies are intended for the lower and middle-income classes, yet they are being utilised by conglomerates through fraudulent means. The quality of the product is meant for a price of Rp8,000, but it is being sold at Rp17,000 per kg. Even more extreme, some are being sold at Rp42,000 per kg, despite not being fortified,” Amran stated in Jakarta on Friday.
Amran explained that the calculation of the subsidy value is based on the total national rice production, where every stage of production receives government support. He estimated that the value of the subsidies allegedly being misappropriated reaches approximately Rp56 trillion. The findings are part of the Ministry of Agriculture’s oversight of fortified rice in the market. Preliminary laboratory tests indicate that approximately 80% of the samples inspected do not meet fortification standards, with average prices found at Rp22,665 per kg, and some as high as Rp42,000 per kg.
The Minister assured that the government will take firm action against perpetrators, including revoking the distribution permits of fortified rice products that fail to meet standards. He also stated that the findings will be handed over to law enforcement agencies once all data collection is finalised. “We will regularise this. I have requested a detailed check. Once it is confirmed, I will revoke the permits,” Amran concluded.