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The Star
4 days ago
- Business
- The Star
Developers slam housing offtake agency scheme
JAKARTA: Property developers have pushed back on the government's proposal to form an offtake agency for the social housing project, calling it a mismatch with the actual problems on the ground and suggesting the government focus on improving financing access for both developers and consumers instead. First presented on July 25 by Deputy Public Housing and Settlements Minister Fahri Hamzah in a meeting with the State-Owned Enterprises Ministry, the proposed agency would function similarly to the State Logistics Agency (Bulog) in rice distribution, only applied to the housing sector. Fahri said the new entity would purchase subsidised houses, specifically those built on government-approved land as part of the 'three million homes' project, and then resell them to the market. In fulfilling this function, he said, the offtake agency would address market absorption for subsidised homes and help tackle the housing backlog as key hurdles in the sector. He also suggested reorienting state-owned developer Perum Perumnas to serve as the housing offtake agency. 'With a backlog of 15 million families, the housing demand is very clear. There's no need to think about marketing. What's needed is for the state to prepare an offtake institution,' Fahri said in a statement. The scheme could mirror public housing models like Singapore and Hong Kong, where dedicated government agencies take the lead in providing homes for citizens. Developers have hit back at the proposal, saying that such an offtake agency would only skim the surface of the housing crisis and not address its root cause. Bambang Ekajaya, vice-chairman of industry association Real Estate Indonesia, pointed to weak purchasing power as one of the major issues contributing to the long-standing backlog. 'What the government needs to do is improve people's purchasing power, because they can no longer afford to buy a house,' Bambang told the The Jakarta Post. He also cautioned against applying the same approach used for rice procurement to housing, as the two sectors were fundamentally different. As goods, rice is a fast-moving staple commodity whereas a house is typically a long-term, once-in-a-lifetime investment. Moreover, establishing a new institution would require additional funding, personnel and infrastructure, Bambang said. He also questioned how the government would finance a housing offtake agency, especially amid the range of large and ambitious projects underway. He urged the government to focus instead on implementing existing plans, improving funding and financing access for developers and ensuring that the housing programme was well-targeted. Bambang clarified that 'existing plans' included the government's recent decision to expand this year's target for the housing finance liquidity facility (FLPP) from 220,000 to 350,000 units, as well as the subsidised housing programme to cover higher-income groups. He noted that the price ceiling for subsidised homes was expected to rise as the government broadened homeownership access for the middle class, making a further rise in the FLPP target essential. 'The government should stop creating new plans and experimenting, and instead ensure that the existing ones are properly executed,' Bambang emphasised. Swandy Sihotang, a property developer at PT Nims Mutiara Indonesia, also highlighted a particular need to focus on improving financing access for consumers to encourage sales of subsidised homes. He also recounted that some prospective buyers of subsidised homes had been hindered by their poor credit ratings in the Financial Information Service System (SLIK) of the Financial Services Authority, a key reference for banks to assess borrowers' creditworthiness. 'I don't see the positive impact of establishing an offtake agency yet because we have no problems with sales, except for consumers' SLIK checks,' Swandy told the Post, noting that most potential buyers of subsidised homes were low-income earners who often struggled to maintain good credit scores. He also raised concerns that the role of developers in the housing market could diminish if the government moved forward with the plan. 'If this so-called housing Bulog is realised and it ends up buying housing units from developers, then what does that make us? We would be reduced to mere contractors whose only task is to build homes,' he said. Anton Sitorus, head of research at real estate firm CBRE Indonesia, also criticised the proposal, saying an offtake agency would only create inefficiencies in the housing market due to its two-pronged business model. —- The Jakarta Post/ANN
The Star
27-07-2025
- Business
- The Star
Indonesian Govt to scrap rice quality classification to curb illegal blending
Workers arrange sacks of rice on July 10, 2025, at the warehouse of the State Logistics Agency (Bulog) in Cimahi, West Java. - Photo: Antara JAKARTA: The government is planning to scrap the rice quality classifications of medium and premium to tackle a recent surge in illegal blending across the country. Coordinating Food Minister Zulkifli Hasan said the decision came in the wake of widespread adulteration of rice that involved blending the two different qualities for selling at premium prices. 'Considering such cases, we will only have one type of rice. No more medium and premium classifications,' Zulkifli said during a meeting on Friday (July 25), as quoted by Antara. According to the senior minister, rice sold in the market would be classified as either 'special' or 'regular', with the former referring to rice varieties that have received government approval for distribution, such as japonica, basmati and black rice. Meanwhile, the price of regular rice would be regulated by the National Food Agency (Bapanas) using a single retail price ceiling (HET), according to Bapanas head Arief Prasetyo Adi. Arief also said the government planned to remove the existing HET for medium and premium rice, and emphasised the need to ensure that all rice sold in the market met quality standards. He added that consumer preference was expected to shift toward trusted brands rather than relying on labels denoting medium or premium quality. 'The quality has to be good. Eventually, people will choose brands based on their experience. Right now people buy premium rice, but [the package] often doesn't contain premium quality,' he said. President Prabowo Subianto has condemned the practice of selling adulterated subsidised rice at premium prices as a 'criminal act, and audacious'. 'This is subsidised rice, mislabeled as premium and sold at a markup of Rp 5,000 [31 US cents] to Rp 6,000,' he said in a speech on Thursday, as quoted by The President also described the practice in the subsidised rice supply chain as ironic, pointing out that the government provided significant support, from rice seedlings to public infrastructure, only for some groups to exploit this for personal gain. '[Medium-quality] rice is repackaged and sold as premium, costing us Rp 100 trillion [$6 million] in annual losses. How can we not be furious when we hear this?' he said. Prabowo estimated that state losses over five years could reach up to Rp 1 quadrillion, a vast fund that could otherwise be used to improve public facilities such as schools and hospitals. The President added that he had instructed the National Police chief and the Attorney General's Office to take firm action against those involved, including confiscating their assets. As a primary staple, rice is one of the most carefully monitored and regulated commodities in the country. The national stockpile reportedly reached a multiyear high of 3.5 million tonnes over the first four months of this year, presenting new logistical challenges for storage. In May, President Prabowo ordered the repurposing of idle land owned by the state, the military and police as temporary storage sites. Statistics Indonesia (BPS) has projected that domestic rice production will continue to rise in the first half of 2025 to reach a national output of 18.76 million tonnes, an increase of 11.17 percent compared to the same period last year. - The Jakarta Post/ANN
The Star
24-04-2025
- Business
- The Star
Indonesian government turns down Malaysia's request to buy local rice
A worker carries rice sacks at a warehouse of the State Logistics Agency (Bulog) in Talumolo village, Gorontalo city, Gorontalo, on March 3, 2024. - Photo: Antara file JAKARTA: The government has turned down a request for rice from Malaysia, with Agriculture Minister Andi Amran Sulaiman explaining that Indonesia cannot export the grain at this time as it seeks to maintain domestic reserves. Amran said Kuala Lumpur had requested to import rice from Indonesia due to insufficient supply that had pushed up prices in Malaysia. 'It was interesting, [Malaysia] asked earlier whether [they] could import rice from Indonesia,' he said during a press conference after a meeting with Malaysian Agriculture and Food Security Minister Mohamad Sabu in Jakarta on Tuesday (April 22), Bisnis reported. 'I said, for the time being, we will maintain the [domestic] stocks. We will assess the climate [conditions first],' he said. The government's rice reserve stocks (CBP) at the State Logistics Agency (Bulog) currently stand at 3.3 million tonnes, the minister said, adding that the target was to increase the level to 4 million tonnes in May. A shortage of supply had driven prices up in Malaysia, Amran said, explaining that the country could only meet around 40 to 50 per cent of national demand. Mohamad Sabu said that, though there was no official directive to import rice from Indonesia, the ministry would discuss the plan further. 'Not yet, but we will discuss,' he said during the same event, as reported by Bisnis, while conveying the country's intention to work with Indonesia to increase its domestic rice production via agricultural technology exchange and training. Amran said Japan's Ministry of Agriculture, Forestry and Fisheries was scheduled to visit Indonesia on April 29 to discuss rice supplies. In Japan, rice prices had also seen a sharp increase, soaring to between Rp 93,000 (US$5.52) and Rp 100,000 per kilogramme, he noted. Rice prices in Japan have risen for 15 consecutive weeks despite government efforts to stabilise the market by releasing stockpiled supplies, local media The Mainichi reported on Tuesday. Japan's agriculture ministry said that the average price for 5 kilogrammes of rice had reached 4,217 yen ($29.72) from April 7 to 13, The Mainichi reported, the highest since tracking began in March 2022, and up 2,139 yen from the same period last year. Based on Statistics Indonesia's (BPS) February Area Sample Framework Survey (KSA), total rice production in the January-May period is estimated to reach 34.47 million tonnes of unhusked rice (GKP). That amounts to around 16.62 million tonnes of rice for public consumption produced in the same period, according to Indonesian Political Economy Association (AEPI) agriculture expert Khudori, as Bisnis reported, which marks an increase of 1.83 million tonnes, 12.4 per cent, from the same period last year. Last year, annual rice production for public food consumption amounted to around 30.62 million tonnes, according to the BPS, a 1.54 per cent drop compared with 2023 production of 31.1 million tonnes. - The Jakarta Post/ANN
