Analysis of Rice Production Cost Structure Case Study Rice Milling in Subang and Serang Regencies

Abstract

Background: One of the determinants of rice prices is production costs, with the largest component being the cost of procuring paddy, which is influenced by yield, price, and operational costs of procuring paddy. Objectives: This study aims to analyze the development of rice milling, the performance of facilities and infrastructure, the structure of production costs and business profits based on the scale of rice milling in Subang and Serang Districts. Methods: The research was conducted in Subang, West Java and Serang, Banten from August to November 2025. The study used primary data obtained through interviews and focus group discussions, while secondary data were obtained from Statistics Indonesia (BPS) and other relevant literature. The data were analyzed using a quantitative descriptive approach. Results and Discussion: The decline in the number of rice mills is thought to be due to the presence of giant companies with capacities of hundreds of tons per day, thus dominating the supply of paddy and rice in the market. Ownership of infrastructure (warehouses and dryers) varies; most small-scale rice mills lack them, most medium-scale mills have them, and large scale mills have them fully equipped. The cost of rice production per kilogram at large-scale rice mills is the highest due to the high cost of procuring paddy. This is driven by their willingness to purchase paddy at higher prices, cross-provincial supply mobility, and the use of brokers to ensure raw material availability. However, the cumulative profits are greater. The number of rice mills at various scales has decreased significantly. Large-scale rice mills have the most complete and adequate facilities and infrastructure. Conclusion: Large-scale rice mills have the highest production costs per kilogram of rice and the highest accumulated profits. To protect rice mills of all scales, regulations are needed that prohibit large-scale rice mills from purchasing grain directly from farmers, while small- and medium-scale mills are required.