Redistribution or Market Concentration? Assessing UMKM Participation in Indonesia’s Free Nutritious Meals Program

Elisabeth Maria Tan

doi:10.65815/k8dbx957

Authors

Elisabeth Maria Tan Consortium of Indonesian Legal and Justice Scientists Author

DOI:

https://doi.org/10.65815/k8dbx957

Keywords:

UMKM, public procurement, market concentration, economic redistribution, food policy

Abstract

Public expenditure on large-scale social programs can generate significant secondary economic effects, particularly for micro, small, and medium enterprises (UMKM). Indonesia’s Free Nutritious Meals Program creates substantial demand for food products and services, potentially providing new markets for local enterprises. However, procurement systems may also favor suppliers with greater financial, administrative, and logistical capacity, creating risks of market concentration. This study examines whether the program functions as an inclusive redistributive mechanism for UMKM or unintentionally reinforces concentration within the food-supply market. The research employs a qualitative institutional analysis of procurement rules, supplier requirements, implementation mechanisms, and barriers to UMKM participation. Secondary socioeconomic evidence is used to identify structural constraints affecting small suppliers, including access to capital, certification, production capacity, logistics, and compliance requirements. The study develops an economic justice framework that evaluates participation not merely through the number of contracted suppliers but through the distribution of economic opportunities across different categories of enterprises. The study argues that the redistributive potential of the program depends on institutional arrangements governing market access. Inclusive procurement policies, simplified compliance mechanisms, and capacity-building interventions may be necessary to ensure that public spending benefits smaller economic actors. The study contributes to research on social procurement and inclusive economic development in emerging economies.

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