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Risks and spatial connectivity evidence from food price crisis in rural Indonesia

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  • Yamauchi, Futoshi
  • Dewina, Reno

Abstract

This paper examines the impact of the agricultural commodity price surge globally experienced in 2007/2008 and thereafter on income growth of agricultural producers and non-producers using recent panel data from Indonesia. First, during this period, producers experienced significantly higher earnings and total income growth than non-producers (narrowing their income gap). Second, the negative effect on non-producers’ real incomes was smaller in spatially well-connected areas, where, to mitigate the impact, private transfers (such as remittances) as well as employment incomes increased among non-producers. In contrast, government programs did not effectively cushion the income shock. Therefore, informal insurance was more effective than formal government-funded social protection programs to mitigate the crisis shock.

Suggested Citation

  • Yamauchi, Futoshi & Dewina, Reno, 2012. "Risks and spatial connectivity evidence from food price crisis in rural Indonesia," Food Policy, Elsevier, vol. 37(4), pages 383-389.
  • Handle: RePEc:eee:jfpoli:v:37:y:2012:i:4:p:383-389
    DOI: 10.1016/j.foodpol.2012.03.007
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    References listed on IDEAS

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    8. Yamauchi, Futoshi & Muto, Megumi & Chowdhury, Shyamal & Dewina, Reno & Sumaryanto, Sony, 2011. "Are Schooling and Roads Complementary? Evidence from Income Dynamics in Rural Indonesia," World Development, Elsevier, vol. 39(12), pages 2232-2244.
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    Cited by:

    1. Jean-Christophe Bureau & Jo Swinnen, 2017. "EU policies and global food security," Working Papers of Department of Economics, Leuven 578549, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    2. Miyazaki, Suguru & Shimamura, Yasuharu, 2014. "Risk, Infrastructure, and Rural Market Integration: Implications of Infrastructure Provision for Food Markets and Household Consumption in Rural Indonesia," Working Papers 81, JICA Research Institute.

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