Food Price Stabilization Policy and Its Impact on Farmer Welfare in Indonesia

Abstract

This study analyzes food price stabilization policy in Indonesia and its impact on farmer welfare, with particular attention to the balance between consumer affordability and farmer income protection. The study focuses on government intervention through market operations, SPHP distribution, Bulog’s role, public food reserves, and domestic procurement. Using a descriptive qualitative approach with policy implementation and welfare analysis, this research examines official statistics, government policy documents, Bulog publications, credible media reports, and relevant academic literature on food price stabilization, rice markets, food security governance, and farmer welfare. The findings show that food price stabilization policy plays an important role in protecting consumers from excessive staple food price increases, especially during periods of rice price pressure and volatile food inflation. However, the policy also creates potential welfare risks for farmers when market intervention suppresses farm-gate prices or is not accompanied by effective domestic procurement. The study finds that Bulog has a strategic dual role in stabilizing consumer prices and absorbing domestic production, but this role depends on stock availability, procurement timing, distribution channels, and institutional coordination. The novelty of this study lies in framing food price stabilization as a distributive governance mechanism that must balance consumer protection and farmer welfare. The study concludes that stabilization policy should not only aim to reduce retail prices, but also maintain fair producer prices, strengthen farmer access to procurement, and protect the sustainability of domestic food production.