Government Sets Permanent HPP for Grain and HET for Rice (2024)

English›Government Sets Permanent HPP ...

The HET for medium rice at the consumer level is permanently set at IDR 12,500-IDR 13,500 per kg depending on zoning.

JAKARTA, KOMPAS — The government sets the government purchasing price (HPP) grain and the highest retail price ( HET) rice permanent. The National Food Agency stated that the HPP for grain and HET for rice are still the same as the temporary or relaxed HPP and HET.

Head of Bapanas, Arief Prasetyo Adi, stated that the price of dry-harvested paddy (GKP) at the farmer level is permanently set at Rp 6,000 per kilogram (kg). The permanent price of medium rice at the consumer level is also set at Rp 12,500 to Rp 13,500 per kg, depending on the zone.

The HET for medium rice at the consumer level is also set permanently at IDR 12,500-IDR 13,500 per kg depending on zoning.

Meanwhile, the permanent ceiling price for premium rice has been set at IDR 14,900 - IDR 15,800 per kg depending on the zone. Both for the rice paddy reference price (HPP) and the rice ceiling price (HET), their amount remains the same as during the second relaxation policy of the reference or benchmark prices.

"The rice grain procurement price and permanent rice price level will be valid until June 5, 2024, unless there are changes in replacement regulations," said Arief on Saturday (June 8, 2024).

Permanent paddy purchasing price (HPP) is regulated in Regulation of the Head of the National Standardization Agency Number 4 of 2024 concerning Amendments to Regulation of the Head of the National Standardization Agency No. 6 of 2023 concerning HPP of Paddy and Rice. This regulation governs the purchase price of paddy and rice along with the quality criteria of both commodities by Perum Bulog at the level of farmers and millers.

In addition to the GKP farmer reference price, the reference price for GKP at mills is also set at Rp 6,100 per kg and the reference price for dried milled paddy (GKG) at mills is set at Rp 7,300 per kg. Meanwhile, the prices of GKG and rice in Bulog warehouses are each set at Rp 7,400 per kg and Rp 11,000 per kg.

Then, the price ceiling for permanent rice is regulated in the Bapanas Regulation Number 5 of 2024 concerning Amendments to Bapanas Regulation No. 7/2023 regarding the Price Ceiling for Rice. The regulation sets the price ceiling for medium and premium rice based on regions or zoning.

In regions such as Java, Lampung, and South Sumatra, for example, medium-grade rice's reference selling price (HET) is set at Rp 12,500 per kg. Meanwhile, premium-grade rice is priced at Rp 14,900 per kg.

Based on data from the Panel of Hot Food Prices on June 8, 2024 at 12.00 pm, the national average price of farmer's unhusked rice (GKP) is Rp 5,920 per kg. This price is below the GKP Minimum Purchase Price (HPP) set at Rp 6,000 per kg and above the average GKP price in June 2024 at Rp 5,380 per kg.

As for the national average prices of medium and premium rice at the retail level, they are Rp 13,450 per kg and Rp 15,550 per kg, respectively. The prices of medium and premium rice have decreased compared to the average prices in May 2024 which were Rp 13,500 per kg and Rp 15,560 per kg, respectively.

Farmers bear rice

Although it has started to decrease, the retail price of rice is still high compared to last year. The high price of rice is inadequate compared to the GKP price at the farmer level, which on average is still below the GKP HPP of Rp 6,000 per kg nationally in May 2024.

This condition also burdens farmers with the still high price of rice. This is indicated by the exchange value of farmers, especially in food crops.

The Central Statistics Agency (BPS) recorded that the farmers' exchange rate (NTP) in May 2024 was 116.71. This NTP decreased by 0.06 percent compared to April 2024, which was at 161.79.

The NTP for the food crop sub-sector was recorded at 104.63, a decrease of 0.86 percent compared to the NTP for food crops in April 2024 which was 105.54. Nevertheless, both NTP and NTP TP are still above the threshold of 100.

On June 3, 2024, Acting Head of BPS Amalia Adininggar Widyasanti stated that the decrease in NTP in May 2024 occurred because the price index received by farmers decreased more significantly than the price index paid to farmers. The index received by farmers decreased by 0.16 percent, while the index paid to farmers decreased by 0.1 percent.

"The decrease in NTP TP in May 2024 occurred because the index received by farmers decreased by 0.99 percent, which is greater than the index reduction paid to farmers by 0.13 percent," he said.

BPS data also shows that the decrease in the index received by farmers is due to a decrease in the index in all constituent groups of NTP TP. In the rice and crops group, for example, the value has decreased by 0.69 percent and 1.45 percent, respectively.

The decrease is far deeper compared to the decrease in prices of goods purchased or consumed by farmers, including rice. This is reflected in the household consumption index for food crops which dropped by 0.22 percent.