IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v10y2022i12p296-d984426.html

Market-Approach-Based Policy to Achieve Rice Price Stability in Indonesia—Can It Be a Complement?

Author

Listed:
  • Topan Ruspayandi

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Tajuddin Bantacut

    (Department of Agroindustrial Technology, Faculty of Agricultural Engineering and Technology, IPB University, Bogor 16680, Indonesia)

  • Bustanul Arifin

    (Department of Agribusiness, Faculty of Agriculture, University of Lampung, Bandar Lampung 35141, Indonesia)

  • Idqan Fahmi

    (School of Business, IPB University, Bogor 16151, Indonesia)

Abstract

Food price volatility broadly impacts the country’s food security. Rice price stabilization in Indonesia is carried out by BULOG, the food state-owned enterprise (SOE) that the WTO has identified as Indonesia’s state trading enterprise (STE). This study was conducted to evaluate the price stabilization program in Indonesia by reviewing the efforts that have been made and analyzing the factors that influence the price of rice at the consumer level using Autoregressive Distributed Lag (ARDL) analysis. The analysis showed that BULOG’s market share affected consumer-level rice prices with a negative coefficient sign, which means that the larger BULOG’s market share, the lower the price of rice will be. Other variables that affect the price of rice at the consumer level are the price of rice itself at the previous time lag, the producer-level paddy price, rice production, rice consumption, and BULOG’s operational rice stock. On the basis of the results of these studies, to realize the stabilization of rice prices in Indonesia, the government can complement stock management through a public policy approach with market-approach-based policies by optimizing the role of Food SOEs as market players in the rice industry.

Suggested Citation

  • Topan Ruspayandi & Tajuddin Bantacut & Bustanul Arifin & Idqan Fahmi, 2022. "Market-Approach-Based Policy to Achieve Rice Price Stability in Indonesia—Can It Be a Complement?," Economies, MDPI, vol. 10(12), pages 1-19, November.
    • Handle: RePEc:gam:jecomi:v:10:y:2022:i:12:p:296-:d:984426
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/10/12/296/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/10/12/296/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. C. Peter Timmer, 2014. "Food Security in Asia and the Pacific: The Rapidly Changing Role of Rice," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 73-90, January.
    2. Robert Engle & Clive Granger, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    3. Hyun Son & Nanak Kakwani, 2009. "Measuring the impact of price changes on poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(4), pages 395-410, December.
    4. Marwa Ben Abdallah & Maria Fekete-Farkas & Zoltan Lakner, 2021. "Exploring the Link between Food Security and Food Price Dynamics: A Bibliometric Analysis," Agriculture, MDPI, vol. 11(3), pages 1-19, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antzoulatos, Angelos A., 1998. "Macroeconomic forecasts under the prism of error-correction models," Journal of Economics and Business, Elsevier, vol. 50(6), pages 535-550, November.
    2. Herwartz, Helmut & Reimers, Hans-Eggert, 2006. "Modelling the Fisher hypothesis: World wide evidence," Economics Working Papers 2006-04, Christian-Albrechts-University of Kiel, Department of Economics.
    3. Bilal Mehmood & Syed Hassan Raza & Mahwish Rana & Huma Sohaib & Muhammad Azhar Khan, 2014. "Triangular Relationship between Energy Consumption, Price Index and National Income in Asian Countries: A Pooled Mean Group Approach in Presence of Structural Breaks," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 610-620.
    4. Farmer, Roger E.A. & Nicolò, Giovanni, 2018. "Keynesian economics without the Phillips curve," Journal of Economic Dynamics and Control, Elsevier, vol. 89(C), pages 137-150.
    5. Tyrväinen, Timo, 1991. "Unions, wages and employment: evidence from Finland," Bank of Finland Research Discussion Papers 16/1991, Bank of Finland.
    6. Flavio Vilela Vieira & Cleomar Gomes Da Silva, 2018. "Brics Export Performance: An Ardl Bounds Testing Empirical Investigation," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 101, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    7. K. Aleks Schaefer & Daniel Scheitrum, 2020. "Sewing terror: price dynamics of the strawberry needle crisis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(2), pages 229-243, April.
    8. Anatoly A. Peresetsky & Ruslan I. Yakubov, 2017. "Autocorrelation in an unobservable global trend: does it help to forecast market returns?," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 7(1/2), pages 152-169.
    9. Muhammad AJMAIR & Khadim HUSSAIN & Sabahat AKRAM & Ambreen ZEB, 2017. "What determines the growth of services sector in Pakistan? A comparison of ARDL bound testing and time varying parametric estimation with general to specific approach," Turkish Economic Review, KSP Journals, vol. 4(3), pages 308-319, September.
    10. Santos, João & Domingos, Tiago & Sousa, Tânia & St. Aubyn, Miguel, 2016. "Does a small cost share reflect a negligible role for energy in economic production? Testing for aggregate production functions including capital, labor, and useful exergy through a cointegration-based method," MPRA Paper 70850, University Library of Munich, Germany.
    11. Law, Siong Hook & Tan, Hui & baharumshah, ahmad, 1999. "Financial Liberalization in ASEAN and the Fisher Hypothesis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 33, pages 65-86.
    12. Lee, Jung Wan & Brahmasrene, Tantatape, 2013. "Investigating the influence of tourism on economic growth and carbon emissions: Evidence from panel analysis of the European Union," Tourism Management, Elsevier, vol. 38(C), pages 69-76.
    13. Cho, Guedae & Kim, MinKyoung & Koo, Won W., 2003. "Relative Agricultural Price Changes In Different Time Horizons," 2003 Annual meeting, July 27-30, Montreal, Canada 22249, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Matthias G. Lutz, 1999. "Commodity terms of trade and individual countries' net barter terms of trade: Is there an empirical relationship?," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(6), pages 859-870.
    15. Ahmed Saddam Abdulsahib, 2024. "Role of Export, Import and Gross Capital Formation in Iraq: A Granger Causality Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 14(5), pages 102-108, September.
    16. Balazs Egert & Carol Leonard, 2008. "Dutch Disease Scare in Kazakhstan: Is it real?," Open Economies Review, Springer, vol. 19(2), pages 147-165, April.
    17. Olsson, Olle & Hillring, Bengt, 2014. "The wood fuel market in Denmark – Price development, market efficiency and internationalization," Energy, Elsevier, vol. 78(C), pages 141-148.
    18. Levent, Korap, 2007. "Modeling purchasing power parity using co-integration: evidence from Turkey," MPRA Paper 19584, University Library of Munich, Germany.
    19. Rodrigo Cerda & Alvaro Donoso & Aldo Lema, 2003. "Fundamentos del Tipo de Cambio Real en Chile," Documentos de Trabajo 244, Instituto de Economia. Pontificia Universidad Católica de Chile..
    20. Vo, D.H. & Nguyen, H.M. & Vo, A.T. & McAleer, M.J., 2019. "CO2 Emissions, Energy Consumption and Economic Growth," Econometric Institute Research Papers EI2019-11, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:10:y:2022:i:12:p:296-:d:984426. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.