Who Benefits from Expensive Rice?

In this country, public perception of the price of one kilogram of rice can indeed vary. The oligarchy, whose daily transport is an Alphard, differs from a primary school teacher who rides rural transport every day.

For the oligarchy, the current highest retail price (HET) for rice is not a problem. However, for those of modest means, the HET for rice needs to be regulated with careful consideration.

On the other hand, President Prabowo’s sarcasm about parties protesting the high price of rice truly has various interpretations. Especially when followed by the sentence, “If you do not agree with the high price of rice, please grow your own rice.” Yes, that is rice. Many meanings are attached and ascribed to it. Generally, everyone agrees that rice is a political and strategic commodity.

The critical question is whether farmers profit from the high price of rice in the market. The answer is not automatic. Expensive rice does not necessarily mean farmers make a large profit. It depends on who the farmer is, when the harvest occurs, and to whom they sell.

This is the fact in 2026: from the price side, there is indeed an effort to ensure farmers profit. In this case, the government uses two benchmarks:

HPP - Government Purchase Price: In January 2025, it was raised to Rp 6,500 per kg for unhusked rice. As of May 2026, the national average price for harvested dry grain is Rp 6,925 per kg. The aim is so that farmers “must not lose money”.

HET - Highest Retail Price: to protect consumer prices.

The National Food Agency even stated that the index of prices received by rice farmers rose from 136.78 in January 2025 to 146.24 in October 2025. This means the welfare of rice farmers has improved. Production in 2025 had a surplus of 3.8 million tonnes and the Bulog government rice reserve reached 3.7-4 million tonnes.

However, on the ground, many farmers still have not felt the benefits. Middlemen often cut prices. There are reports of farmers in Kulonprogo whose grain was only valued at Rp 5,100 per kg by middlemen, even though the 2025 HPP was already Rp 6,500.

Various problems related to field phenomena show that costs are rising faster than selling prices. In March 2026, rice prices rose at all levels, but the farmers’ terms of trade (NTP) actually fell by 0.08 percent.

The cause is that the prices farmers must pay for petrol, cooking oil, rice, and chicken meat rose by 0.41 percent. So even though the selling price of grain rose, the costs of fertiliser, fuel, and other items rose even higher.

Furthermore, not all farmers sell to Bulog. Bulog only buys during harvest time and for the government rice reserve. If it is not the main harvest season or outside Bulog’s absorption areas, farmers often sell to traders at prices below the HPP.

In this situation, government policies that favour farmers are needed. Another matter often discussed is why rice remains expensive even though there is supposedly a surplus.

The Ombudsman found a paradox: mathematically, Indonesia has a surplus of 3.6 million tonnes of rice, but in the market it remains scarce and expensive. The causes are slow distribution, quality issues, and supply constraints. Retail prices in May 2026: premium rice Rp 15,758 per kg, medium rice Rp 13,444 per kg. Still 10-14 percent above the HET.

So, the conclusions that can be drawn include: first, farmers who harvest when prices are high and sell directly to Bulog or official institutions are indeed more advantaged. The HPP increase and production increase have raised incomes.

Second, small farmers who sell to middlemen and face rising production costs are not necessarily better off. Rice prices may be high, but they can still lose money because the NTP has fallen. The most advantaged are the middle chain: rice mills, traders, and distributors. Because retail prices have risen, but not all of the increase reaches the farmers.

Responding to the existing reality, the government now remains focused on being “fair on both sides”: farmers do not lose money, and consumers are not burdened.

The government continues to ensure that farmers, as rice producers, receive a reasonable income commensurate with their hard work. That is why it is reasonable for the government to provide optimal protection and advocacy for rice farmers.

Along with that, the government must also continue to protect consumers. The government is obliged to regulate and control rice prices so that the public obtains a reasonable price level. The rice price stabilisation policy is a concrete form of government intervention in regulating rice prices in the market.

Finally, the issue of expensive and cheap rice is often debated, but facts cannot lie. When the price of medium rice in the market reaches Rp 15,000 per kg, low-income groups complain.

They often ask why, amid abundant rice production, the price of rice is expensive.

This question should prompt the government to provide a smart answer. Is it not true that if rice is abundant and in surplus, the price should be cheaper? Generally, rice prices tend to soar when rice is indeed unavailable, meaning there is a deficit.