An Assessment of the Impact of Higher Yields for Maize, Soybean and Cassava in Indonesia: A Multi-Market Model Approach

The changing structure of food demand will generate pressure to diversify away from cereals. It is therefore important that cereal productivity increases be maintained to free land as well as to meet the rising demand for animal feed. This study uses a multi-market model to assess the impact of yield increases for maize, soybean and cassava on cropping patterns, prices, incomes, and other variables of interest to policy makers. Raising maize yield reduces imports and has small but positive side-effects in terms of output and consumption of other commodities and in terms of household’s welfare. Raising maize yields and then removing rice tariffs adds a large increase in soybean output and rice imports to the maize yield increase scenario. The impact on household income is modest with middle and bottom income households more affected – and more so in Java. Livestock production and consumption rise strongly and purchasing power of households is much improved. Raising maize, cassava and soybean yields stimulates production of these crops and reduces imports in particular of maize and cassava but not of soybeans. Rice imports also fall strongly. Household welfare is positively affected but by little. Combining maize, cassava and soybean yield increases with a rice tariff elimination has a particularly pronounced effect on soybean production. Livestock production and consumption grow strongly. Rice imports fall very sharply as do maize imports. Household incomes generally fall but the effect is small. Purchasing power on the other hand increases significantly.