Indonesia's powerful anti-graft agency will launch a probe into the nation's subsidized rice scheme unless major flaws are fixed, threatening moves to expand the role of the state food buying agency into other staples such as corn, beef and sugar.
With nearly a third of the rice estimated to go missing and allegations of some rotting before it gets to poor families, the future of the scheme and the wider issue of food security will be an early policy test for president-elect Joko Widodo.
Widodo has promised cleaner, more efficient government when he takes office in October and along with fixing dysfunctional state bodies also faces tough economic decisions such as whether to rein in fuel subsidies that have blown out the budget.
After a year-long review, the anti-graft agency (KPK) had given the state food buying agency, Bulog, which manages the scheme, until December to fix problems or it will launch a full-scale probe, said KPK investigator, Roni Dwi Susanto.
A probe by KPK into Bulog's flagship rice scheme, which is known as RASKIN and has an annual budget of about $1.7 billion, could disrupt plans to give the agency broader power over more commodities in the major food importer.
As Indonesia's population has risen to more than 240 million, RASKIN has become one of the world's biggest rice subsidy programs. It said it distributed about 3.7 million tons of the grain last year to about 16 million families.
Bulog Chief Executive Sutarto Alimoeso conceded that as much as 30 percent of RASKIN rice went missing, but said the agency had taken steps to improve the situation such as introducing identity cards for recipients and punishment for traders who repurchase subsidized rice.
"Bulog is now transparent," said Alimoeso, whose five-year term is drawing to a close, but may remain CEO if reappointed by the new president.