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Agricultural Protection In Indonesia

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  • George Fane
  • Peter Warr

Abstract

Throughout the second half of the 20th century, Indonesia's trade policies favoured the modern manufacturing sector relative to agriculture. Within agriculture, they favoured import-competing sectors at the expense of export-competing sectors. Rice is the most important import-competing agricultural sector and, until 2000, assistance to rice growers came mainly from input subsidies. The extent of subsidies to rice and other import-competing agriculture varied with foreign exchange availability and the government's budgetary circumstances: 'good' times produced more interventionist policies and 'bad' times produced less government intervention. Since the mid-1980s, the aggregate bias in favour of manufacturing has declined greatly and agriculture is now only lightly taxed relative to manufacturing. This change resulted from the reduction in manufacturing protection that has characterised this period and from the increased protection of rice and sugar occurring after 2000. We attempt to explain the political forces underlying these changes in trade policy.

Suggested Citation

  • George Fane & Peter Warr, 2008. "Agricultural Protection In Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 44(1), pages 133-150.
  • Handle: RePEc:taf:bindes:v:44:y:2008:i:1:p:133-150
    DOI: 10.1080/00074910802001611
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    Cited by:

    1. Warr, Peter & Yusuf, Arief Anshory, 2011. "Reducing Indonesia’s deforestation-based greenhouse gas emissions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), September.
    2. Peter Warr & Arief Anshory Yusuf, 2009. "International food prices and poverty in Indonesia," Departmental Working Papers 2009-19, The Australian National University, Arndt-Corden Department of Economics.
    3. Warr, Peter, 2014. "Agricultural liberalization, poverty and inequality: Indonesia and Thailand," Journal of Asian Economics, Elsevier, vol. 35(C), pages 92-106.
    4. Peter Warr & Arief Anshory Yusuf, 2014. "Fertilizer subsidies and food self-sufficiency in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 571-588, September.
    5. Warr, Peter G., 2009. "Agricultural Protection and Poverty in Indonesia: A General Equilibrium Analysis," Agricultural Distortions Working Paper 52788, World Bank.
    6. Peter Warr & Arief Anshory Yusuf, 2014. "World food prices and poverty in Indonesia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(1), pages 1-21, January.
    7. Permani Risti, 2011. "The Impacts of Trade Liberalisation and Technological Change on GDP Growth in Indonesia: A Meta Regression Analysis," Global Economy Journal, De Gruyter, vol. 11(4), pages 1-30, December.
    8. Permani, Risti, 2013. "Optimal Export Tax Rates of Cocoa Beans: A Vector Error Correction Model Approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(4), December.

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