(Jakarta, 20th) – As Indonesian students return to school after a three-week break, the government's flagship Free Nutrition Meal Program has resumed as well. Around 30,000 designated central kitchens nationwide have started operating again, and the bulk purchasing has caused prices of many staple goods in Indonesia to rise, with the most notable increases in broiler chicken and eggs.
According to The Jakarta Post, experts point out that the sharp rise in food prices following the restart of the free meal program exposes and amplifies longstanding structural weaknesses in Indonesia's food supply chain, including weather-induced crop reductions, seasonal declines in harvests, inefficient logistics and distribution networks, as well as supply-demand imbalances.
The increase in food prices has not only squeezed household budgets, but also eroded commercial profit margins. To stabilize the market, the Indonesian government introduced new farm gate reference prices last Wednesday (July 15), but this intervention measure has not alleviated consumer concerns. Many shoppers say that market prices remain well above the government's benchmark rates.
Gita Latri (27), a private sector employee in South Tangerang, Banten Province, said her daily expenses have clearly increased in the past week. At the traditional market she frequents, the price of tofu has risen from about 5,000 rupiah (approximately 1.14 ringgit) per pack to 7,000 rupiah; prices for garlic, red onions, and chilies have also gone up.
Gita Latri (27), a private sector employee in South Tangerang, Banten Province, said her daily expenses have clearly increased in the past week. At the traditional market she frequents, the price of tofu has risen from about 5,000 rupiah (approximately 1.14 ringgit) per pack to 7,000 rupiah; prices for garlic, red onions, and chilies have also gone up.
She said: “The most noticeable change has been in egg prices. During the period when the Free Nutrition Meal Program was suspended, eggs were much cheaper.”
According to Indonesia's Central Statistics Agency, broiler chicken prices have risen the most, increasing by more than 4% in just one week—from an average of 20,878 rupiah per kilogram the previous week to 21,736 rupiah last Tuesday.
Data from Indonesia's National Food Agency shows that last week, egg prices fluctuated between 20,300 rupiah and 28,200 rupiah per kilogram.
According to Indonesia's Central Statistics Agency, broiler chicken prices have risen the most, increasing by more than 4% in just one week—from an average of 20,878 rupiah per kilogram the previous week to 21,736 rupiah last Tuesday.
Data from Indonesia's National Food Agency shows that last week, egg prices fluctuated between 20,300 rupiah and 28,200 rupiah per kilogram.
The Indonesian National Nutrition Agency, which implements the Free Nutrition Meal Program, announced last month that in order to relieve fiscal deficit pressures, the government suspended meal provision during the school holidays from June 22 to July 13, a move expected to save the government over 3 trillion rupiah.
Now that the holidays are over and the nutrition meal program has resumed, the resulting price increases have not only increased consumers' burdens, but also put extra pressure on vendors, as rising wholesale prices erode their already slim profit margins.
Elisa, a researcher at the Center for Economic Reform, an independent Indonesian economic think tank, said this is a structural issue. “Producers initially expected the Free Nutrition Meal Program to bring stronger demand and ramped up production, but these expectations turned out to be overly optimistic. Meanwhile, consumer purchasing power has declined, further widening the gap between supply and demand.”
Elisa suggested that the government build a more flexible supply chain in the future and optimize procurement plans to improve overall supply chain resilience and ease the impact caused by additional demand from the nutrition meal program.
The National Nutrition Agency admitted in a statement last week that market absorption capacity was weaker during the school holiday suspension of the meal program, but claimed that the recent price hikes are a positive sign of sustainability for the poultry farming industry.