Food Station’s Tactics to Keep Rice Prices in Check

PT Food Station Tjipinang Jaya is implementing a cross-subsidy strategy to keep rice prices affordable amid rising unhusked rice costs at the farm level.

The price ceiling must inevitably be adjusted

PT Food Station Tjipinang Jaya President Director, Dodot Tri Widodo explained that producers are strictly prohibited from selling rice above the government-mandated price ceiling (HET). The price cap for premium rice is set at Rp 14,900 per kg, while medium rice is capped at Rp 13,500 per kg.

On the flip side, unhusked rice prices at the farm level have seen a significant spike. From the Government Procurement Price (HPP) by Rp 6,500 per kg, the market price has now climbed to approximately Rp 7,500 per kg.

Food Station Unveils Strategy to Steady Food Supplies and Prices

"Using a rough rule of thumb, the conversion from unhusked rice to processed rice is nearly double. This means Rp 7,500 (for unhusked rice) translates to Rp 15,000 per kg of rice. And that is before accounting for packaging, distribution, and other overhead costs,” he expressed, during a working meeting between the Jakarta City Council’s Commission C and food-related regional-owned enterprises (BUMD), Tuesday (4/28).

These circumstances have pushed rice production costs beyond the HET. At the same time, producers are unable to unilaterally hike prices as they risk falling foul of regulations and the oversight of the Food Task Force.

According to him, a realistic solution would be for the government to adjust the price cap. He noted, if unhusked rice prices could be driven back down to the Rp 6,500 per kg range, a healthy balance between farmers, producers, and consumers could be restored.

“With unhusked rice prices soaring as they are, the price ceiling must inevitably be adjusted to allow producers to stay afloat with reasonable profit margins,” he continued.

He added that the authority to set and adjust the HET rests with the National Food Agency (Bapanas), which typically consults with industry players to strike an ideal profit margin.

Further, Food Station plans to submit a proposal for HET adjustment through the Association of Indonesian Rice Millers and Entrepreneurs (Perpadi).

Amidst this uncertainty, Dodot continued, the company is also rolling out alternative strategies, such as boosting sales of non-HET products. This includes organic rice, red rice, premium varieties like Pandan Wangi and Rojolele, as well as fortified rice, all of which fall outside the HET regulatory scope.

Additionally, Food Station is ramping up sales in bulk packaging, such as 25 kg and 50 kg bags, to drive down packaging and distribution overheads, particularly within traditional markets.

He emphasized that this move is part of a cross-subsidy strategy designed to keep the company’s finances in the black while simultaneously safeguarding public purchasing power.

“This allows consumers to purchase rice at local stalls by bringing their own containers. While this approach cannot be implemented on a large scale just yet—particularly in modern retail where packaging remains a must—it serves as a viable solution for traditional markets,” he explained.

Jakarta City Council's Commission C Secretary, Ismail views Food Station’s plan to propose an HET adjustment through the association as a sensible move. He added, the company has begun optimizing sales of rice under the Stabilization of Food Supply and Prices (SPHP) program as a key strategy to bolster its financial performance.

“I see they are also exploring other avenues, namely ramping up SPHP sales. The margins there provide some breathing room, which can serve as a form of cross-subsidy for the BUMD’s bottom line,” he pointed out.