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View all search resultsFree meals program offers little lift for MSMEs, survey finds
A research from Indef revealed that around 80 percent of MSMEs had yet to identify new business opportunities from the free meal program.
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A student serves cut melon to a classmate during a trial of the free nutritious meal program using a buffet-style system at Muhammadiyah Bantar Elementary School in Sentolo, Kulon Progo, Yogyakarta, on Oct. 8, 2026. The National Nutrition Agency (BGN) is developing the buffet-style system, involving students in scheduled food service to test the effectiveness of serving meals that are warmer and fresher while reducing food waste. (Antara/Rahid Putra Laksana)
D
espite the programs’ widespread reach, most micro, small and medium enterprises (MSMEs) had yet to benefit from President Prabowo Subianto’s flagship initiatives, including free nutritious meal program and Red and White Cooperatives, raising concerns about their ability to generate inclusive local economic growth.
The survey from the Institute for Development of Economics and Finance (Indef) of 1,806 formal and informal MSMEs conducted in August found that 97 percent of respondents were familiar with free meals program, which had reached 92 percent of the villages and urban wards covered by the survey.
However, around 80 percent of respondents had yet to identify new business opportunities from the program.
Meanwhile, 22 percent businesses reported declining business activity following the free meals program’s introduction, compared with only 5 percent who experienced an increase, with informal businesses were the most negatively affected.
Dzulfian Syafrian, a researcher at Indef’s Center of Trade and Investment, said the impact of government spending depended on where the money was spent and which businesses supplied the programs.
“If MBG [free meals program] ingredients are purchased from farmers and MSMEs around the kitchens, the money will circulate several times in the village and create a multiplier effect. Conversely, if supplies come from large suppliers outside the region, more of the economic benefits will accrue outside that area,” Dzulfian said in a statement on Oct. 18.
He warned that the free meals program could divert spending previously directed toward school canteens and vendors near schools. A similar risk could arise if Red and White Cooperatives outlets competed directly with existing village shops.
