Indonesia Revolutionizes Fertilizer Management with New Regulation

Transforming Agricultural Efficiency

Indonesia has taken a significant step in agricultural reform with the implementation of Presidential Regulation No. 113/2025, as announced by Coordinating Minister for Food Affairs, Zulkifli Hasan. The new regulation transforms the fertilizer management system from 'cost plus' to 'market to market', resulting in immediate and significant benefits for farmers.

Key Improvements in Fertilizer Distribution

1. 20% discount on fertilizers for farmers
2. Plans for seven new fertilizer plants within five years
3. Improved distribution efficiency allowing farmers to access subsidized fertilizers more easily
4. Elimination of bureaucratic complexities in fertilizer procurement

The Minister highlighted that the previous 'cost plus' system has been replaced by a more efficient 'market to market' approach. This change has enabled fertilizer companies to be more efficient, resulting in cost savings that are passed on to farmers. The impact has been immediate, with farmers reporting smoother access to fertilizers since January 1, 2025.

Positive Impact on Agricultural Sector

The new regulation has received positive feedback from various stakeholders. Rahmad Pribadi, CEO of PT Pupuk Indonesia, expressed gratitude for the regulatory change, stating that it has enabled the company to provide better services to farmers. The improved efficiency has not only reduced costs but also enhanced the overall distribution mechanism.

The agricultural sector is expected to benefit significantly from this policy, with increased efficiency in fertilizer distribution likely to boost agricultural productivity. The local government, represented by Magelang's Vice Regent Sahid, welcomed the initiative, highlighting the potential of their region's agricultural sector with over 81.6 hectares of agricultural land.