INSTITUTIONAL REFORM IN INDONESIA'S FOOD SECURITY SECTOR: THE TRANSFORMATION OF BULOG INTO A PUBLIC CORPORATION

Abstract

The National Food Logistics Agency (BULOG) which had managed food security, bufferstock operations, and domestic food price stabilization through its monopoly over imports and distribution was reorganized into a public corporation, “Perum BULOG,” in May 2003. This study investigates the background and the process of reforming BULOG, and seeks to clarify the characteristics and remaining problems of institutional reform implemented in Indonesia since the economic crisis and the impact of globalization. The major findings are: (1) the reforms led by the IMF and World Bank were an attempt to curtail the rent-creation mechanism in BULOG and to improve its corporate governance; (2) globalized and standardized modules of institutional reform methods were applied for reforming BULOG, but the implanted institutions will need substantial time to take root; (3) there is still a failure to coordinate among food security institutions, particularly between the Ministry of Agriculture and Perum BULOG.