Indonesia is confronting one of its largest food industry scandals in recent years, as multiple government agencies unite to investigate systemic corruption, fraud, and regulatory violations in the rice sector. At the heart of the probe are allegations that hundreds of rice brands, many operated by major producers, have been repackaging low-quality or subsidised rice and marketing it as premium-grade, often at inflated prices. The crackdown is being led by the Attorney General’s Office (AGO), the National Police’s Food Task Force (Satgas Pangan), the Ministry of Agriculture, and the National Food Agency (Bapanas), under direct instruction from President Prabowo Subianto.

This multi-agency initiative aims to dismantle what officials describe as entrenched “food cartels” exploiting state subsidies and manipulating consumer prices. Attorney General ST Burhanuddin and Police Chief General Listyo Sigit Prabowo have pledged to carry out the president’s directive without compromise, citing the long-term damage these fraudulent practices inflict on food security, public trust, and the national economy.

Six major companies under scrutiny

The AGO’s Special Task Force on Corruption Cases has begun by summoning six prominent rice producers suspected of playing a central role in the illicit practices. According to Anang Supriatna, head of the AGO’s legal information centre, only two of the companies responded to the summons, while others requested delays or failed to appear without explanation, as reported by Antaranews.

These companies are being questioned on their role in the misallocation of rice subsidies and potential abuse of state funding. The AGO is focusing particularly on how subsidised rice, intended for low-income consumers, may have been diverted, repackaged, and sold under premium labels to maximise profit margins. Supriatna stated that the investigation will extend to other parties and is intended to ensure that “state funding is not misused under the guise of rice distribution.”

Police seize over 200 tonnes in criminal investigation

In a separate but related development, the National Police’s Food Task Force has launched a full criminal probe, seizing over 201 tonnes of mislabeled rice during raids on warehouses and markets across Jakarta and surrounding regions. Brigadier General Helfi Assegaf, who heads the task force, confirmed that the confiscated rice was being sold under well-known brands such as Sania, Setra Ramos, Jelita, Anak Kembar, and Setra Pulen, Jakarta Globe reports. Lab tests confirmed that the rice did not meet the premium quality standards advertised on the packaging.

The seizure included 39,036 five-kilogramme bags and 2,304 smaller units, along with extensive documentation such as brand certificates, business permits, and production records. Assegaf explained that in many cases, producers used machines to manipulate broken rice percentages, giving the appearance of higher quality. Others ordered pre-labeled “premium” packaging but filled it with inferior rice sourced indiscriminately from various suppliers.

Fraud techniques: From packaging to pricing

The investigation revealed a variety of methods used to deceive consumers. Some companies operated through manual repackaging processes, simply sourcing whatever rice was available and stuffing it into branded bags without checking quality or weight. Others adopted more technologically advanced techniques, using machinery to blend broken or low-grade rice to mimic the texture and appearance of higher-quality grains.

In many cases, the rice being sold failed in three key areas: quality, weight, and pricing. Investigators found that 85.56% of tested “premium” rice samples did not meet government standards, 59.78% were priced above the government’s maximum retail ceiling (HET), and 21.66% were underweight. The findings suggest a widespread and deliberate effort to deceive consumers across multiple stages of the supply chain as reported by Jakarta Daily.

Ministry of Agriculture identifies widespread violations

The Ministry of Agriculture, led by Minister Andi Amran Sulaiman, has been instrumental in pushing for the investigation. Sulaiman told lawmakers during a July 16 hearing that the ministry had tested 268 rice brands, and 212 failed to meet the legal thresholds for quality or price. He confirmed that a full list of violators had been submitted to the AGO and National Police for prosecution, Jakarta Daily reports.

Notably, Sulaiman revealed that some companies had repackaged rice from the government’s SPHP (Food Supply and Price Stabilisation) programme, which is meant to be sold at subsidised prices to low-income families. Instead, this rice was relabeled and marketed as premium, a move that not only violates subsidy laws but also undermines food assistance efforts.

Economic impact and consumer harm

The economic impact of these fraudulent practices is staggering. Authorities estimate consumer losses of up to IDR99 trillion ($6.1bn), a figure that includes overpayments due to false labeling, underweight products, and artificially high prices. Minister Sulaiman pointed out that the price surge is particularly troubling given that Indonesia’s rice production in 2025–2026 is projected at 35.6mn tonnes, above the national target of 32mn tonnes, according to the Food and Agriculture Organisation (FAO).

“The numbers don’t add up,” Sulaiman said. “We’re seeing record production and yet prices remain high. That suggests the issue is not supply, but manipulation.” The minister warned that such practices not only erode consumer trust but also put pressure on inflation, especially for low-income households.

Zero tolerance for offenders

To address the crisis, the government has issued a two-week ultimatum for all implicated businesses to come into compliance or face legal consequences. Sulaiman confirmed that 11 individuals have already been sanctioned, including one senior agriculture official who is now on the police’s wanted list. Those found guilty of violating the Consumer Protection Law could face prison sentences of up to five years and fines of IDR2bn (around $123,500), Antaranews reports.

“This is not political grandstanding,” Sulaiman said. “We’re taking internal and external action. We did this before in 2016–2017 when we shut down PT Indo Beras Unggul. We’re continuing that work on a broader scale.”

Public support and legal backing

The crackdown has received strong support from academics and the public. Muhammad Makky, an agricultural economist from Andalas University, praised the investigation as a vital move to restore trust in the nation’s food supply. “Consumers need protection from corporate greed. The government’s firmness sends a clear message,” he said, as reported by Jakarta Globe.

Legal scholar Hudi Yusuf from Bung Karno University echoed these sentiments, calling the practice of repackaging substandard rice as premium “a severe violation of public trust” and noting that repeat offenders like Wilmar Group have previously faced charges for illegal palm oil exports and obstructing justice.

A high-stakes battle for food security

Indonesia’s rice fraud investigation has rapidly evolved into a sweeping campaign against economic crime in the food sector. With hundreds of brands under scrutiny, millions of kilogrammes of product seized, and both corporate and individual actors under threat of prosecution, the government is signaling zero tolerance for abuse in one of the country’s most sensitive industries.

As Minister Sulaiman declared before Parliament: “The state must not back down in the face of food cartels.” This moment could prove a turning point in Indonesia’s long-standing struggle to ensure food security, transparency, and fairness in its agricultural economy.