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Rice Prices And Poverty In Indonesia

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Author Info

  • Neil McCulloch

Abstract

One of the reasons often given for government policies that promote higher rice prices is the desire to protect farmers and to reduce poverty, particularly in rural areas. The underlying assumption is that farmers benefit from higher rice prices and that helping farmers will reduce poverty since the majority of the rural poor are connected in some way with agriculture. This paper examines the evidence underlying this assumption. I show that only around a quarter of all households plant rice. A large majority of the population, including in rural areas, consume more rice than they produce and most are therefore harmed by higher rice prices. Those that gain from higher prices tend to be farmers with access to slightly larger plots of land. Thus an increase in the rice price constitutes a transfer from the large majority of consumers to a minority of producers at all income levels.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/00074910802001579
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 44 (2008)
Issue (Month): 1 ()
Pages: 45-64

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Handle: RePEc:taf:bindes:v:44:y:2008:i:1:p:45-64

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Web page: http://www.tandfonline.com/CBIE20

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Web: http://www.tandfonline.com/pricing/journal/CBIE20

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Cited by:
  1. Dawe, David & Maltsoglou, Irini, 2014. "Marketing margins and the welfare analysis of food price shocks," Food Policy, Elsevier, vol. 46(C), pages 50-55.
  2. Martina Kirchberger, 2014. "Natural disasters and labour markets," CSAE Working Paper Series 2014-19, Centre for the Study of African Economies, University of Oxford.
  3. Raul Caruso & Ilaria Petrarca & Roberto Ricciuti, 2014. "Climate Change, Rice Crops and Violence. Evidence from Indonesia," CESifo Working Paper Series 4665, CESifo Group Munich.
  4. Joko Mariyono, 2009. "Technological and Institutional Changes in the Indonesian Rice Sector: from Intensification to Sustainable Revitalization," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture, vol. 6(2), pages 124-144, December.

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