COVID-19 and the efforts to slow the transmission of the virus, including social distancing (and Large-scale Social Restrictions or PSBB in some areas) and transport disruptions are bringing profound impact to various levels of the Indonesian socio-economic system. Amidst the crisis, the Government of Indonesia (GOI) has been urged to deliver a robust fiscal response to shield households, business and financial markets from more significant damage.
The GOI has taken an immediate action by enacting a series of fiscal and non-fiscal measures to mitigate the economic turmoil due to the pandemic. As of March 2020, the government has allocated an extra of IDR 401.5 (USD 24.5 billion) for financial stimulus in the 2020 state budget; nearly 55% of it is allocated for economic recovery which includes credit restructuring and financing for small and medium enterprises, and tax incentives and credit for business.
In addition to the fiscal packages, the GOI has also been introducing other measures to help impacted individuals and business (especially Micro, Small, and Medium Enterprise or MSME). Among the highlighted measures related to agriculture and finance are:
The GOI regulations to combat COVID-19 are targeting various levels of the community, including those in agriculture and rural settings. The hope is that some of these measures may soften the impact felt by farmers, traders and MSMEs for the current harvest, and ultimately prevent large scale loan defaults in rural areas. These policies will go a long way in reducing the debt burden for many, including those in the agricultural value chain. This may allow farmers, traders and local market actors to maintain their cash and reinvest it into another season.
To support the GOI and play its role in ensuring the continuity of agricultural value chain, PRISMA is continuously looking to provide means of ensuring that farmers have access to quality inputs with flexible payment schemes and MSMEs have access to finance. It is expected that their businesses can weather this storm and that commodities and supply chains can continue to function if we support these initiatives, work alongside the GOI efforts and increase the use of technology during this time.
 Coordinator Ministries of Economic, 2020. Formal Media Announcement of KUR Relaxation for up to 6 Months