When free school meals paused, food got cheaper

When Indonesia's free school-meals program paused for the month-long school holiday, shoppers noticed something quickly: food got cheaper. In Surabaya, the price of chicken fillet fell from 44,000 to 28,000 rupiah (about US$1.56), and lettuce dropped from 40,000 to just 5,000 rupiah a kilogram. As Nikkei Asia reports, the pause helped ease inflation, the general rise in prices, which was running at 3.34 percent a year in June.

The reason points to how big the program has become. Called MBG, President Prabowo Subianto's free-meals plan ran 28,390 kitchens serving 62.5 million meals a day before the break. That is a huge, steady buyer of chicken, vegetables, and rice, and when one buyer takes that much off the market every day, it pushes prices up for everyone else. The economist Bhima Yudhistira Adhinegara, from the research group CELIOS, estimates that every 10 MBG kitchens add between 0.03 and 0.12 percent to local monthly inflation. So when the kitchens stop for the holiday, that extra demand disappears and prices fall.

The relief is likely temporary. Prices are expected to climb again once schools reopen in the middle of the month. The program is under strain in other ways too: the new head of the food agency, Nanik S. Deyang, has cut its 2026 budget from 335 trillion to 268 trillion rupiah, after cases of food poisoning and a corruption scandal.

Why it matters

If you shop for a family, this explains a swing you can feel at the market, and it warns that the cheaper prices will not last past mid-month. For the country, it reveals a hidden cost of the free-meals program: feeding tens of millions every day lifts food prices for everyone else. Watch whether the government changes how it buys food, so the program can feed students without squeezing ordinary shoppers.