With Rice Self-Sufficiency Achieved, Deputy Agriculture Minister Plans to Address Sugar Issues

Jakarta, CNBC Indonesia - Proposals from farmers to remove consumer-level sugar price caps in order to boost production have received a response from the government. Deputy Minister of Agriculture (Wamentan) Sudaryono emphasised that price limit policies are still necessary to maintain a balance between farmers’ and consumers’ interests.

He explained that in the national food system, the government indeed implements two main instruments: floor prices and ceiling prices.

“I think it’s like this, in our country… why is there a floor price or flooring price, and a ceiling price. The floor price is to protect producers, or farmers. Whereas the ceiling price, HET (highest retail price) or HAP (reference selling price), is to protect consumers,” said Sudaryono when met at the Parliament Complex, Jakarta, on Tuesday (14/4/2026).

According to him, this policy applies not only to sugar but also to various other strategic food commodities.

“So rice, rice, corn, sugar, shallots, garlic, chillies, they all have HPP and HET,” he continued.

Sudaryono stressed that the main goal of setting price limits is to maintain market stability so as not to disadvantage either party.

“What’s the purpose? The purpose is to maintain price stabilisation. From our perspective as the government, of course, HAP and HET are treated so that both parties are satisfied,” he explained.

According to him, production increases are not solely determined by price. The government views productivity as a key factor, as has been applied to the paddy commodity.

“So the challenge for us in agriculture, especially once again, is, let’s not talk about sugar, let’s talk about paddy,” he said.

“If paddy in 1 hectare, your harvest is less, of course your harvest won’t be enough for living costs. But after HPP (purchase cost price) was raised, productivity was boosted, so the price multiplier factor is higher, and the quantity multiplier factor is also higher. So the rupiah obtained is more,” Sudaryono added.

A similar approach, he said, will also be applied to the sugarcane commodity to increase national sugar production.

“Just like paddy, the treatment for sugarcane is more or less the same,” he stated.

On the other hand, Sudaryono highlighted urgent field issues, namely the phenomenon of sugar produced by farmers not being absorbed by the market, even though Indonesia still lacks supply.

“So far, I’ve seen that what needs to be sorted out in the near term is, don’t let there be any more sugarcane milling farmers turning it into sugar, but the sugar isn’t bought by anyone. In my opinion, in the midst of us importing sugar or us lacking sugar, but our farmers’ sugar isn’t bought,” he asserted.

He described the situation as a paradox that must be resolved immediately.

“So it’s called a paradox. There’s something contradictory. It should be if goods are scarce, the goods should sell well, but this isn’t,” said Sudaryono.

“Goods are scarce, but the goods don’t sell. Well, that’s what really needs to be sorted out. So we already know where the problem is, we solve it, what needs to be addressed in the short term, and in the long term, including dismantling ratoon and so on, we must do,” he added.

Previously, the General Chairman of the Indonesian Smallholder Sugarcane Farmers Association (APTRI) Soemitro Samadikoen assessed that farmers’ interest in planting sugarcane is low because the sugar selling price is deemed unattractive.

“Planting or growing sugarcane is still not attractive. Because the sugar price is limited,” Soemitro revealed to CNBC Indonesia some time ago.

He stated that the ideal sugar price should be around 1.5 times the rice price to provide sufficient incentives for farmers.

“Sugar now, the production cost is already over Rp15,000. So the price should at least almost break even at Rp16,875,” he explained.

According to him, with thin margins, farmers prefer to switch to other commodities like paddy, which is considered more profitable.

“Compared to planting paddy, planting paddy is still more profitable. So don’t limit the sugar price,” he said.

He also urged the government to lift the upper sugar price limit and leave the pricing mechanism to the market.

“Let the market determine the price. Don’t let us be capped. Our production cost is already that much, but the selling price above it is limited,” Soemitro asserted.