"The low-interest financing scheme from the Ministry of Finance is still being finalized," said Arief Prasetyo Adi, head of the National Food Agency (Bapanas), in Jakarta on Monday.
He stated that the funds would not be provided as state capital injection but as loans with a guarantee from the Finance Minister.
Previously, BULOG received Rp1 trillion (approximately US$65.8 million) in loans for managing government food reserves. The company has been entrusted with managing stocks of rice, corn, and soybeans.
Meanwhile, ID FOOD is responsible for managing stocks of meat, eggs, chicken meat, sugar, cooking oil, shallots, garlic, and fish.
Adi said that the government will provide interest rate subsidies to the state food enterprises, so they will only need to pay an interest rate of 3-4 percent, which is below the market rate of 8-10 percent.
These companies will serve as off-takers to ensure the absorption of agricultural products, thereby strengthening the government's food stocks.
Adi explained that the food reserves would be used for food stock and price stabilization, as well as food aid distribution, among other purposes.
The low-interest financing scheme for these companies aligns with President Joko Widodo's instruction to strengthen state food enterprises as off-takers who can purchase agricultural, animal husbandry, and fishery products produced in the country.
By playing the role of off-takers, these companies can provide price certainty and guarantee the absorption of products, which can encourage farmers to increase their production.
Related news: BRIN to provide data and research on food to Bapanas
Related news: NFA, BRIN agree to use AI for food data
Translator: Indra A Pribadi, Sri Haryati
Editor: Anton Santoso
Copyright © ANTARA 2023
