The Indonesian government has officially issued regulations for financial guarantees to strengthen the government’s food reserve stock (CPP). These regulations are contained in the Minister of Finance Regulation No. 34 of 2023 concerning the Procedure for Providing Government Guarantees in the Context of Government Food Reserves.
The Head of the National Food Agency (NFA), Arief Prasetyo Adi, explained that these regulations are part of the national food reserve strengthening scheme, which is regulated through the mechanism of providing interest rate subsidies.
This guarantee is necessary to ensure that subsidies for strengthening CPP stocks managed by Bulog and ID Food as offtakers of agricultural, livestock, and fishery products can operate well based on the principle of caution.
The regulation, signed by Minister of Finance Sri Mulyani on March 24, 2023, regulates various aspects, ranging from government guarantee procedures, government support for business entity assignments, settlement of consequences from guarantee implementation, management of default risks, as well as bookkeeping and reporting of implementation assignments.
Through this regulation, the State Logistics Agency (Bulog) and State-Owned Food Enterprise (BUMN) can apply for bank loans with interest subsidies for CPP management with government guarantees through the Directorate General of Financing and Risk Management of the Ministry of Finance and Business Guarantee Agency designated by the government.
Previously, through the Minister of Finance Regulation No. 153/PMK.05/2022, the mechanism for providing interest rate subsidies for CPP management was regulated. Arief also appreciated the Ministry of Finance for issuing two follow-up regulations regarding Presidential Regulation No. 125 of 2022 concerning the Management of Government Food Reserves.
“We highly appreciate the Ministry of Finance for these two regulations. We hope that these regulations will provide guidance in efforts to strengthen CPP for national food security,” he said.
The initial ceiling amount provided by the Association of State Banks (Himbara) is IDR 3 trillion, with IDR 1 trillion for Bulog in the management of CPP for rice, corn, and soybeans, while IDR 2 trillion for ID Food in the management of CPP for chicken meat and eggs, beef, sugar consumption, cooking oil, shallots and garlic, and fish.
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