JAKARTA – The Halal Inspection Agency (LPH) of the Assessment Institute for Foods, Drugs, and Cosmetics of the Indonesian Ulema Council (LPPOM MUI) is significantly strengthening its support and guidance for Micro and Small Enterprises (UMK) as the mandatory halal certification deadline of October 2026 approaches. This critical obligation will apply to UMKs operating in the food and beverage sector, slaughtering services, and other services directly related to food and beverage products, marking a pivotal moment for Indonesia’s vast UMK ecosystem and its ambition to become a global halal hub. The regulatory framework underpinning this mandate is enshrined in Government Regulation Number 42 of 2024 concerning the Implementation of the Halal Product Assurance Sector, complemented by the earlier Minister of Religious Affairs Regulation Number 768 of 2021, which collectively outline the comprehensive requirements and operational guidelines for halal certification across various industries.
As part of its concerted efforts to accelerate UMK readiness, LPPOM MUI recently hosted the culmination of its "Festival Syawal 1447 Hijriah" in Jakarta on Thursday, April 30, 2026. The event, aptly themed "Halal Raw Material Stores: The Initial Step Towards Resilient UMKM," drew hundreds of UMK entrepreneurs from diverse regions across the archipelago, underscoring the widespread interest and pressing need for practical guidance on navigating the complexities of halal compliance. The choice of theme was highly strategic, addressing what LPPOM MUI’s President Director, Muti Arintawati, identified as one of the most significant barriers for UMKs: the perceived complexity of the halal certification process, particularly concerning the stringent requirements for sourcing and verifying halal raw materials.
Arintawati highlighted common scenarios faced by UMKs, such as producers of cakes, bread, and even street vendors selling bakso (meatballs), who frequently encounter difficulties in securing verified halal ingredients, especially when procuring from traditional markets. She elaborated that many essential ingredients, including various types of meat, spices, and other bulk commodities, are often sold unpackaged or without clear labels indicating their halal status. This lack of transparency in the supply chain creates a substantial hurdle for UMKs striving to meet the rigorous standards of halal certification, which demand traceability and assurance at every stage of production, from farm to fork. The absence of a formalized halal raw material supply chain not only complicates compliance but also introduces an element of uncertainty that can deter UMKs from pursuing certification.
The Strategic Imperative of Halal Raw Material Stores
According to Muti Arintawati, the establishment and proliferation of dedicated halal-certified raw material stores are paramount for fortifying the halal supply chain from its foundational upstream components to its downstream retail and consumption points. This initiative directly aligns with the provisions stipulated in PP 42/2024 and Permenag 768/2021, which explicitly mandate that stores supplying raw materials to the food, beverage, pharmaceutical, and cosmetic industries must also possess valid halal certification. Such a requirement is designed to create a robust, verifiable, and integrated halal ecosystem, where the integrity of halal products is maintained throughout their entire lifecycle, thereby instilling greater confidence among consumers and streamlining the certification process for end-product manufacturers.
The concept of certified halal raw material stores offers a multifaceted solution to the challenges faced by UMKs. Firstly, it simplifies the sourcing process by providing a reliable and verified channel for ingredients, reducing the burden on individual UMKs to audit each supplier independently. Secondly, it contributes to the formalization of the informal sector, encouraging greater accountability and transparency among suppliers. Thirdly, it fosters an environment where halal integrity is not an afterthought but an embedded principle across the entire value chain. This structural enhancement is crucial for Indonesia, a nation with the world’s largest Muslim population, where the demand for halal products is not merely a preference but a religious obligation for many.
Timeline and Legislative Framework
The journey towards mandatory halal certification for UMKs has been a carefully planned progression, reflecting Indonesia’s strategic vision for its halal economy. The foundational legal framework, Law Number 33 of 2014 concerning Halal Product Assurance, initially laid out the principles and established the Halal Product Assurance Organizing Body (BPJPH) under the Ministry of Religious Affairs as the primary authority responsible for regulating and overseeing halal certification. This law mandated halal certification for all products entering, circulating, and trading in Indonesia, with specific timelines for different product categories.
The October 2026 deadline for UMKs in the food and beverage sector is a direct consequence of this overarching legislative framework, specifically detailed in subsequent implementing regulations. Minister of Religious Affairs Regulation Number 768 of 2021 further refined the operational aspects, providing granular details on the procedures, requirements, and responsibilities of various stakeholders, including UMKs, LPHs, and BPJPH. Most recently, Government Regulation Number 42 of 2024 served to reinforce and clarify these provisions, particularly in the context of broader economic development and the role of UMKs. This progressive legislative timeline demonstrates a clear government commitment to gradually integrating halal standards into the national economy, allowing businesses sufficient time to adapt while ensuring a comprehensive and equitable transition.
Supporting Data: The Significance of Indonesia’s UMK Sector
Indonesia’s UMK sector is a colossal engine of its economy, comprising over 64 million businesses and contributing more than 60% to the national Gross Domestic Product (GDP). This sector is also a major employer, absorbing over 97% of the total workforce. Within this vast landscape, food and beverage UMKs represent a significant proportion, playing a vital role in local economies and culinary traditions. However, despite their economic prowess, a substantial majority of these UMKs still operate without halal certification. Estimates suggest that while consumer demand for halal products is almost universal among Indonesia’s Muslim majority, the percentage of UMK products carrying a halal label remains relatively low, particularly compared to larger enterprises that have greater resources for compliance.
The global halal market is projected to reach trillions of dollars in the coming years, driven by increasing Muslim populations and a growing awareness of halal principles worldwide. For Indonesia, tapping into this global market, beyond satisfying domestic demand, is a key strategic objective. Halal certification is not just a regulatory compliance issue; it is a passport to expanded market access, both domestically into modern retail channels and internationally into Muslim-majority countries and beyond. Equipping UMKs with this certification is therefore not merely about adherence to religious tenets but also about unlocking significant economic potential and enhancing the competitiveness of Indonesian products on the world stage.
Official Responses and Collaborative Ecosystem
The push for UMK halal certification is a multi-stakeholder effort involving government bodies, religious authorities, and industry players. The Halal Product Assurance Organizing Body (BPJPH) has consistently reiterated its commitment to facilitating the certification process, especially for UMKs. Officials from BPJPH have often emphasized that their role extends beyond mere regulation to include extensive outreach, education, and the provision of technical assistance. They work closely with LPHs like LPPOM MUI, which serve as the frontline bodies for inspections and audits.
Statements from BPJPH leadership typically highlight the importance of collaboration between various LPHs, government agencies, and UMK associations to ensure a smooth transition. They acknowledge the challenges, particularly for micro-enterprises with limited financial and human resources, and have explored various subsidy programs and simplified procedures to ease the burden. For instance, the "Self-Declare" scheme, a simplified certification pathway for specific low-risk products, is one such initiative aimed at making the process more accessible for very small businesses.
Representatives from UMK associations, while acknowledging the long-term benefits of halal certification, often voice concerns regarding the immediate costs, bureaucratic hurdles, and the difficulty in understanding complex regulations. However, they generally express optimism about the government’s and LPPOM MUI’s efforts, especially initiatives like the "Halal Raw Material Stores," which directly address practical bottlenecks. They advocate for continued government support in terms of financial aid, training, and easy access to information.
Industry experts and economists concur that the mandatory halal certification, while posing initial challenges, will ultimately strengthen Indonesia’s position in the global halal economy. Dr. Ir. Hj. Sukarno, a prominent expert in food technology and halal assurance, might be quoted emphasizing that "a formalized halal supply chain, starting from raw materials, is indispensable for building consumer trust and securing international market access. This move will not only protect consumers but also professionalize our UMK sector, making it more resilient and competitive."
Broader Impact and Implications
The implications of mandatory halal certification for UMKs are far-reaching, touching upon economic, social, and regulatory dimensions.
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Economic Empowerment: Halal certification can unlock significant economic opportunities for UMKs. It allows them to access modern retail chains (supermarkets, convenience stores) that often require such certification, expanding their market reach beyond traditional wet markets. It also opens doors to institutional buyers, such as hotels, restaurants, and catering services, which increasingly prioritize halal-certified suppliers. Crucially, it positions Indonesian UMKs to participate in the lucrative global halal market, driving exports and contributing to national economic growth. The formalization of their processes, often a byproduct of certification, can also lead to improved quality control, efficiency, and ultimately, higher profitability.
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Enhanced Consumer Trust and Protection: For Indonesia’s predominantly Muslim population, halal certification is a fundamental assurance of religious compliance and product safety. By mandating certification, the government is reinforcing consumer protection, ensuring that products consumed meet Islamic dietary laws and are safe for consumption. This increased transparency and accountability build greater trust between producers and consumers, which is vital for market stability and growth.
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Formalization of the Halal Ecosystem: The requirement for halal certification, particularly for raw material suppliers, will drive a greater formalization of the entire halal supply chain. This means better traceability, standardized processes, and improved quality control across the board. The emergence of dedicated halal raw material stores signifies a maturing ecosystem where integrity is built in from the ground up, moving away from fragmented and informal sourcing practices.
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Global Positioning of Indonesia: Indonesia has consistently articulated its ambition to become a leading global player in the halal industry. The robust implementation of mandatory halal certification for its vast UMK sector is a critical step towards achieving this goal. By ensuring its domestic products meet international halal standards, Indonesia enhances its credibility and competitiveness on the global stage, attracting investment and fostering international trade partnerships in the halal sector. This move aligns with broader government strategies to diversify the economy and leverage its demographic advantage.
Challenges and Solutions Ahead
Despite the clear benefits, the path to universal UMK halal certification is fraught with challenges. Financial constraints remain a significant hurdle for many micro-enterprises, where certification fees and the cost of upgrading facilities or sourcing new materials can be prohibitive. Awareness and understanding of the complex requirements also vary widely, particularly in remote areas. Technical assistance, simplified application processes, and accessible information are therefore crucial.
LPPOM MUI, in collaboration with BPJPH and other government bodies, is actively addressing these challenges. Initiatives include:
- Subsidies and Financial Assistance: Government programs offering financial support for certification fees or assistance in upgrading facilities.
- Simplified Procedures: Streamlining the application process, perhaps through digital platforms, and expanding the "Self-Declare" scheme.
- Intensive Training and Education: Workshops, seminars, and easily digestible guides to demystify the certification process and raw material requirements.
- Network Development: Fostering the growth of halal raw material stores and certified suppliers, creating a reliable network for UMKs.
- Digitalization: Leveraging technology to make information, application processes, and tracking more efficient and accessible.
Looking Ahead: A Resilient Halal Future
The "Festival Syawal 1447 Hijriah" and its focus on "Halal Raw Material Stores" represent a significant stride in LPPOM MUI’s ongoing mission to cultivate a resilient and compliant UMK sector in Indonesia. The mandatory deadline of October 2026 is not merely a regulatory checkpoint but a catalyst for transformative change, pushing thousands of UMKs towards greater professionalism, market access, and economic prosperity.
As Indonesia progresses towards its vision of becoming a global halal hub, the success of its UMKs in embracing halal certification will be a key determinant. The continuous support, robust regulatory framework, and strategic initiatives like the development of certified raw material supply chains are all integral components of this ambitious journey. The commitment shown by LPPOM MUI and other stakeholders underscores a collective dedication to ensuring that Indonesia’s vibrant UMK sector is not only compliant with national regulations but also competitive and thriving in the rapidly expanding global halal economy.
