On Wednesday (March 13), Indonesia’s National Food Agency (NFA) chief Arief Prasetyo Adi announced in parliament that Indonesian state-owned banks will provide government-backed loans to state-owned food enterprises (BUMN-BUMN Pangan). This initiative goals to make sure the supply of rice and other foodstuffs within the face of disrupted harvests as a result of prolonged drought.
State-owned banks are preparing to supply loans price a complete of 28.7 trillion rupees ($1.84 billion) this yr, of which 6 trillion rupees have already been disbursed.
The Indonesian government will even subsidize interest costs on loans, leading to an rate of interest of two% if food businesses provide collateral for the loans, and three% without collateral.
He explained that the aim of this program is to encourage food corporations to grow to be ready buyers and recipients of products from local farmers. He also stressed the importance of those loans as some food businesses still need financial support.
Bulog and ID FOOD were chosen as the businesses that can receive loans. The funds will go towards securing stocks of varied essential food items equivalent to rice, corn, shallots, chili peppers, beef, chicken, eggs, sugar, cooking oil and fish.
Since last yr, Southeast Asia’s largest economy has been combating rising food prices, especially rice, resulting from low production attributable to the El Niño weather phenomenon.
