BGN States SPPG Units Will Receive Rp500 Million Daily; Farmers Claimed to Benefit from Cash Flow
The National Nutrition Body (BGN) has stated that 93 percent of total budget is distributed directly to Nutrition Service Units (SPPG) across Indonesia without passing through local governments. The Free Nutritious Meal Programme (MBG) benefits are claimed to be felt by farmers whose products are directly absorbed by the SPPG.
From a total of Rp268 trillion, approximately Rp240 trillion circulates directly throughout Indonesia.
“BGN presents a new model in which 93% of BGN funds are distributed directly to SPPGs. So, if there are funds of Rp268 trillion, roughly Rp240 trillion in money circulates from Sabang to Merauke, and each day every SPPG receives Rp500 million. I believe this is a new model—not a single rupiah is channelled from the centre to the regions (local governments),” said BGN Head Dadan Hindayana in a written statement.
Dadan revealed that money circulating from Sabang to Merauke has reached approximately Rp36 trillion to date. This fund circulation is described as the engine driving the economy, promoting equitable distribution across all regions of Indonesia.
Dadan noted that the number of operating SPPGs determines the volume of funds circulating in each region. Therefore, the more SPPGs operating in an area, the greater the funds circulating in that region.
Dadan stated that this policy also has direct impacts on the local production sector. In the MBG programme, local products are guaranteed to be absorbed by BGN. This creates market certainty for farmers and local business operators.
“This has never happened in any previous era—local production guaranteed absorption by the state as it is now. It is no wonder that carrot farmers in East Nusa Tenggara are pleased because carrot prices can triple,” he explained.
The increase in production absorption impacts the improvement in Farmers’ Terms of Trade (NTP). He noted that average NTP currently stands at 125, up from previously around 102. When NTP is in the range of 100-102, farmers’ production only suffices for living expenses without room for investment. However, with an achievement of 125, farmers have 25 points of room for investment and improving family welfare.
“I am confident that with the MBG programme, the Farmers’ Terms of Trade can rise to 150,” he added.
Dadan assessed that the circulation of large sums of money in early the year is something that has never happened before in Indonesia. Last year, the government injected economic stimulus of Rp37 trillion in the first quarter, which drove economic growth of 4.7%.
This year, by March alone, BGN fund circulation is projected to reach Rp62 trillion. The magnitude of fund circulation through the MBG, according to Dadan, has become a significant economic stimulus.
“Many business operators report that liquidity in the field is now easier to find because of massive and even money circulation,” said Dadan.