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The Ombudsman Suspects the Bapanas Circular Letter Concerning the Upper Limit Prices for Grain and Rice is Maladministration

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JAKARTA – A member of the Indonesian Ombudsman, Yeka Hendra Fatika, said that his party suspects there is a potential for maladministration in the issuance of circular letter (SE) No.47/TS.03.03/K/02/20230.

The SE was stipulated on February 20 2023 and issued by the National Food Agency (Bapanas) to regulate farmers’ ceiling prices for grain.

“I hope the National Food Agency (Bapanas) will immediately review the SE because the allegations of maladministration are very strong. Assumptions, yes. It means that we, the Ombusdman, are currently gathering various kinds of information and insights regarding this policy,” said Yeka in a statement received by The Editor on Wednesday (1/3).

Yeka explained that this allegation was based on the unusual SE format, where SE is generally known as a legal product whose material contents are binding on the public but are not statutory regulations.

Because it is not a statutory regulation, a circular letter is an administrative instrument that is internal in nature.

“The circular letter is usually for internal use but for external use. Second, even if that is what is intended, the aim is good but the momentum is not quite right–it’s out during the main harvest (panen raya) season,” he explained.

It’s known that Bapanas through the SE sets a ceiling price for harvested dry unhusked rice (GKP) at the farm level of IDR4,550 per kilogram, GKP at the mill is IDR4,650 per kilogram, and dry milled unhusked rice (GKG) at the mill is IDR5,700 per kilogram.

Meanwhile, the price of medium rice at Bulog warehouses is set at IDR9,000 per kilogram.

“The top price is set at a certain level below the economic average price of the market equilibrium. In SE, for example, if the top price is IDR4,550, it means that farmers are not allowed to sell for IDR5,500,” said Yeka.

“In fact, the price of IDR5,500 to IDR6,000 is legal in the market balance and it is inappropriate for this price to regulate farmers,” he continued.

Furthermore, Yeka hopes that Bapanas can immediately revoke SE No.47/TS.03.03/K/02/20230 and carry out duties according to their proper duties and authorities.

In the governance of food policy, Bapanas exercises great authority, one of which is in determining the HPP.

“If it is intended to regulate the Bulog government, it may be through the HPP instrument. They only need to correct the HPP, because it is an instrument used by the government to buy commodities from the farmers,” he said.

“That one can be arranged. However, if it regulates farmers to set prices like that, the Ombudsman thinks this is not fair to farmers, especially when it is applied during the rainy season like this,” concluded Yeka.

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