Indonesia recorded a significant rice surplus during the March to May harvest season. Dr. Sujarwo, S.P., M.P., an agribusiness expert from Universitas Brawijaya, said that this phenomenon is an annual cycle due to the peak of national rice production.
“In these months, the supply of rice is abundant, far exceeding demand. This is a great opportunity for the government to strengthen the national food stock by 3 million tons or more,” explained Dr. Sujarwo, Thursday (6/5/2025).
Responding to the rice export discourse, he supports the step on the condition that rice exports are carried out selectively. “Exports are fine, but prioritize premium rice that is competitive in the international market. Don’t let exports interfere with domestic food availability, which is the main priority,” he said.
He reminded that in the domestic sphere when there is a surplus without active absorption, it can trigger a decrease in the price of rice which is detrimental to farmers. “Market law applies: when supply is high and demand remains the same, prices fall. The government must be present through Bulog to absorb rice so that prices remain stable at around IDR 6,500 per kilogram,” he explained.
In addition to the issue of price, Dr. Sujarwo highlighted the need for institutional reform in the agricultural sector. He emphasized that farmer cooperatives must be built on the basis of member awareness, not just government projects. “If cooperatives only stand because of assistance, they usually die once the assistance is finished. We must follow the example of cooperatives in developed countries such as Japan and New Zealand,” he said.
Dr. Sujarwo also reminded of the importance of maintaining the carrying capacity of agricultural land amidst massive land conversion. He considered the concept of Sustainable Food Crop Land (LP2B) to be seriously revived, accompanied by sustainable agricultural practices such as regenerative farming. “It is not enough to just rely on annual surpluses. We must build a strong and sustainable production foundation,” he said.
Meanwhile, according to a Professor of Economics FEB, Prof. Setyo Tri Wahyudi, SE., M.Ec., Ph.D. this rice surplus can be interpreted positively and negatively. “Based on the theory of supply and demand, the supply of rice in the market that exceeds demand will drastically reduce the price of unhusked rice. This condition will harm farmers in the form of decreasing/reducing farmer profit margins. However, at the consumer level such as households, it has a positive impact because there is a decrease or stabilization of rice prices,” he said.
Meanwhile, regarding exports, as Sujarwo said, he agreed to carry out limited exports to countries in need to reduce domestic supply pressure while maintaining domestic needs. As well as empowering farmers in the value chain and guaranteeing minimum prices through framing contracts and integration of e-logistics systems, involvement of farmer cooperatives and BUMDes, and effective public communication policies so that panic selling or hoarding by speculators does not occur.
“With these steps, the surplus will not be likely to distort the market and can be an economic safety net,” he said.
Setyo explained that if the national rice surplus is assumed to be the result of domestic production and does not depend on imports, then this abundant stock condition will provide a positive contribution to the Indonesian economy. “Macro-economically, the existence of strong rice reserves can support the stability of food prices in the long to medium term, which is an important component in controlling inflation,” Setyo said.
On the other hand, if the surplus cannot be absorbed by the market, it will cause an overproduction trap, which is a condition when production exceeds market capacity and results in structural losses for producers. “In this context, a surplus does not automatically mean welfare if its distribution is not managed efficiently,” he added.
Setyo also explained that if the possibility of an overproduction trap can be overcame through appropriate policy interventions such as a buffer stock system, measured exports, and social distribution. Stakeholders (government, Bulog, and market players) must implement adaptive absorption and distribution policies. [RST/AND/AIK/UB PR/ Trans. Iir]
