Evolution and Implementation of the Rastra Program in Indonesia

Policy Research

Among the countries reviewed in this volume, only Indonesia has not engaged in major reforms of its food subsidy program, at least until recently. Its flagship food subsidy program Rastra, formerly Raskin (Rice for the Poor), has made some improvements in delivery, but its overall performance continues to be limited. As such, some rethinking of the business model as well as the form of transfers provided is overdue.

Meanwhile, Indonesia has achieved significant progress in building and scaling up its cash transfer programs. Reflecting the progress achieved, the government recently took important steps toward reforming and modernizing Rastra. As this chapter shows, these steps are in line with global trends in the evolution of food-based social assistance. However, the international experience also suggests that such transitions will take time, will need to be sustained politically, will need to go beyond Rastra itself, and will require revisiting both the role of actors in different sectors and the objectives. This chapter explores the history, design, implementation, and impact of Indonesia’s experience with food-based social safety nets. That experience started well before the implementation of Rastra—a program introduced after  the Asian financial crisis in 1997–98 that distributes rice directly to poor households at heavily subsidized prices. The chapter examines that history (a) for insights into the rationale behind the broad concern in Indonesia for providing basic food security to its citizens and the specific role of rice in it and (b) for clues that reveal the underlying political economy of the programs’ design and implementation.

As illustrated in chapter 1 of this volume, until recently the nature and design of Rastra had changed relatively little over time, but the program was, and largely still is, woven into a broader set of agricultural and price management objectives. Indonesia’s approach to food security is remarkably well studied and documented, from Dutch colonial days to the present. However, the rich historical record, full of repeated food crises linked to institutional learning, provides only limited insights into the future of food-based safety nets in the country. Indonesia is attempting a radical reform of Rastra, including cashing out its benefits everywhere that food (rice) markets are working reasonably effectively and leaving only isolated areas, mostly in Eastern Indonesia, where the direct delivery of rice remains a cost-effective means of providing food security to poor households.

Even in those circumstances, Rastra needs to be seen as part of a much broader array of social safety nets. It has been understood for several decades that effective food policy—one that is successful in reducing poverty and hunger to low levels within a generation—needs to employ all the levers of economic development, not just those available to ministries of health or agriculture.

The chapter reviews the history of Indonesia’s approach to food security for its citizens. It focuses particularly on three basic ways to achieve that goal: (a) stabilizing rice prices, especially in urban markets; (b) generating a widespread process of pro-poor growth that pulls the rural poor into a rapidly expanding economy; and (c) providing direct food subsidies to poor households, which it has pursued since 1998 through Rastra. The first half of the chapter lays out the historical and political economy perspective; the second half reviews the design, implementation, and impact of Rastra as of early 2017 and discusses briefly the most recent pilots to reform it. A final section discusses the lessons learned.

Share this page

Author 
Peter Timmer
Hastuti
Sudarno Sumarto
Author(s)
Peter Timmer
Hastuti
Research Area 
National
Keywords 
Rastra
Raskin
Social safety net
rice for the poor
Publication Type 
Book and Book Chapter
PDF icon Download (5.13 MB)