Effects of High Food Prices on Non-Cash Food Subsidies (BPNT) in Indonesia Case Study in East Nusa Tenggara - Case Study in East Nusa Tenggara
February 29, 2020  //  DOI: 10.35497/300890
Assyifa Szami Ilman

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Abstract

Poor Indonesian households spend most of their monthly income on food (62.72%) (BPS, 2016).
Their average food consumption is dominated by rice (62.14%) and lacks protein, legumes, fruits
and vegetables, which are needed for a nutritional diet (BKP Kementan RI, 2018).

High food prices contribute to the inability to purchase more nutritious food in Indonesia. They
also reduce the effectiveness of the Non-Cash Food Subsidy (BPNT) program, which aims to
increase nutritious food intake through a grant to purchase rice and eggs. Vegetables, legumes
and fruit were added to the program in 2020. In 2019, BPNT kiosks (e-warong) in Kupang, East
Nusa Tenggara purchased their rice and eggs from wholesalers in Makassar and Surabaya,
making the prices dependent on those charged in these cities.

An experimental simulation by CIPS conducted with women on Sumba Island found that:
• price increases led to lower food purchases and a fall in monthly household
consumption by 1.78 kilogram of rice and 3.73 eggs;

• the BPNT program increased average household rice and egg consumption by 21.4
kilogram and 33.79 eggs, respectively.

• when the BPNT program met with a price increase scenario, egg consumption
fell by 1.2 eggs per person while rice consumption increased by another 1.46
kilogram compared to the consumption before the price change. Price spikes made
households sacrifice protein intake.

Positive nutritional effects of the BPNT program are being reduced by high rice and egg prices
in Indonesia. The government should complement the BPNT program with policy reforms that
reduce food prices in the country. Price interventions have not kept prices within the set range
for these food commodities. Instead, Bulog’s medium-quality rice import monopoly (Presidential
Instruction No. 5/2015) and the policy of setting rice import quotas through inter-ministerial
coordination meetings (MOT Regulation No. 1/2018) should be reevaluated. Maize imports should
also increase, since maize is an important ingredient of chicken feed and affects the price of
eggs.

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