Report on Pilot Implementation of the 2018 Area Expansion of the Noncash Food Assistance Program

We express our sincerest gratitude to the One Almighty God for His blessings and guidance, that we have been able to complete this “Report on the Pilot Implementation of the 2018 Area Expansion of the Noncash Food Assistance Program”.

In compliance with the directions from the President, the Noncash Food Assistance Program (Bantuan Pangan Nontunai, BPNT) has been implemented in the context of reforming the Rastra Rice Subsidy Program. The main objective of such food assistance transformation is to ensure that Family Beneficiaries (Keluarga Penerima Manfaat/KPM) would receive the rice in the correct amount, at the right time and with adequate quality. In addition, BPNT has granted flexibility to beneficiaries for selecting the type, quality, price, and place for buying the rice.

The Rastra rice delivery system has been changed with an electronic voucher mechanism by using the banking system which has been implemented in phases as from early 2017. Since it is a very substantial change, it is necessary to conduct a pilot first. The initial pilot was conducted in 2016 and for the program expansion in 2018, a pilot was conducted in 2017. This document contains report on the process and results of the pilot conducted in 2017.

The pilot was conducted with four (4) main objectives. First, to assess the preparedness of the banking infrastructure (such as transaction equipment, signal, and bank agents). Second, to assess the preparedness of the distribution network, food prices, and behaviors of Family Beneficiaries in buying food as well as the support of local governments in the pilot implementation. Third, to test the design and mechanism for the BPNT disbursement in district/municipal areas with limited road access and communication networks. Fourth, to recommend improvements of the design and mechanism at every implementation stage.

The pilot was conducted in ten districts/municipalities, namely: (1) Deli Serdang District, North Sumatra Province, (2) Boyolali District, Central Java Province, (3) Kulon Progo District, DI Yogyakarta Province, (4) Kediri District, East Java Province, (5) Tabanan District Bali Province, (6) East Lombok District, West Nusa Tenggara Province, (7) Balikpapan Municipality, East Kalimantan Province, (8) Gowa District, South Sulawesi Province, (9) Tual Municipality, Maluku Province, and (10) Sorong Municipality, West Papua Province.

The pilot included tests on the entire chain of activities in noncash food and social assistance disbursement, namely: (1) Preparation of the beneficiary data, (2) Delivery of notification letters to beneficiaries, dissemination, and education, (3) Account registration and activation of the means of transactions by beneficiaries through agents, including the preparedness of the agents, (4) Benefit disbursement through Basic Saving Accounts, and (5) Utilization of the noncash assistance benefits in the form of the pre-designated food assistance.

The pilot implementation team comprised representatives of the relevant ministries/ agencies, namely the Coordinating Ministry for Human and Cultural Development, Ministry of National Development Planning/National Development Planning Agency (Kementerian/Badan Perencanaan Pembangunan Nasional (PPN/Bappenas)), Ministry of Social Affairs, Ministry of Home Affairs, TNP2K Secretariat, Presidential Staff Office, Disbursing Banks, in this case PT. BNI Tbk. and PT. BRI Tbk., as well as the Pilot Team of each pilot district/municipality.

The benefit fund in the disbursement pilot (in June and July 2017) was from the State Budget (Anggaran Penerimaan dan Belanja Nasional/APBN) for the Ministry of Social Affairs. Whereas the accompanying fund for the pilot implementation was from APBN for each of those Ministries/Agencies and the Australian Department of Foreign Affairs and Trade (DFAT).

The process and results of the pilot are to be used as the main reference in the preparation and improvement of the General Guidelines for BPNT as well as to provide lessons learned and anticipation of obstacles in the implementation of the 2018 BPNT in the expansion areas, including less accessible areas. We would like to express our gratitude and highest appreciation to the local governments in the pilot areas, the Board of Directors of PT. BNI Tbk. and the Board of Directors of PT. BRI Tbk., as well as all parties who have supported the pilot implementation which allowed successful implementation of the pilot.

We hope that this report can provide inputs for all relevant parties for the successful implementation of BPNT Program in 2018 as well as other noncash assistance.