Industry Ministry Boosts Food SME Contribution via IFI 2026 Programme

The Ministry of Industry (Kemenperin) is encouraging the development of small and medium food industries (IKM) to boost their contribution to the national economy through the annual Indonesia Food Innovation (IFI) 2026 coaching programme. Director General of Small, Medium, and Miscellaneous Industries (IKMA) Reni Yanita stated in Jakarta on Wednesday that the programme is focused on strengthening IKM capabilities in developing intermediate products. According to her, intermediate product development is a crucial strategy to enhance the competitiveness of food SMEs. She outlined four main reasons for this focus: intermediate products create higher added value; their processing can extend the shelf life of food materials and reduce food waste; they provide access to a wider and more sustainable B2B market; and they serve as a foundation for developing various downstream product innovations with higher economic value. “Therefore, strengthening IKM capacity in producing intermediate products is an important step to reinforce the structure of the national food industry,” Reni said. She added that the development of intermediate products based on local resources aligns with the implementation of Presidential Regulation Number 81 of 2024 concerning the Acceleration of Food Diversification Based on Local Resource Potential. In support of this policy, her directorate and the National Food Agency are currently drafting an incentive policy for developing food systems based on local resources and wisdom. The planned incentives include easier access to financing, technology subsidies, accelerated certification, facilitation of business-to-business market access, and product standardisation support. Meanwhile, Minister of Industry Agus Gumiwang Kartasasmita stated in a written release that the food industry sector plays a strategic role in maintaining national economic growth while strengthening food security. Therefore, food industry development must be carried out not only on final consumer products but also on upstream industries and intermediate products that form the foundation of the food industry supply chain. According to the Minister, the processing industry remains the main engine of the national economy, contributing 19.10 percent to the Gross Domestic Product (GDP) in the first quarter of 2026 and recording growth of 5.04 percent. Within the entire manufacturing sector, the food and beverage industry is the largest contributor with a share of 36.6 percent and recorded export values reaching 3.16 billion US dollars in March 2026. On the other hand, SMEs remain the foundation of the national industrial structure. The number of SMEs reaches 99.7 percent of the total industrial business units in Indonesia and absorbs more than 65 percent of the industrial sector workforce. Specifically for food SMEs, the number reaches approximately 2.07 million business units, equivalent to 46.63 percent of the total national SMEs. Despite their large numbers, the Ministry acknowledges that some food SMEs still face challenges, ranging from limited resources, unmet standardisation and business legality, limited product innovation, to fluctuations in raw material supply and changes in market demand. Director of Food, Furniture, and Building Materials Industries Afrizal Haris noted that IFI, which has been held since 2020, is one of the flagship programmes for food SME development. To date, the programme has been attended by more than 2,000 food SMEs from across Indonesia through the end product and intermediate product development categories.