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Agricultural policies in Indonesia

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  • Thomas, Marcelle
  • Orden, David

Abstract

As in many other developing countries, the concerns about food security in Indonesia during the 1980s and early 1990s resulted in policies aimed at achieving self-sufficiency in food crops. The Government of Indonesia (GOI) combined price interventions and economic incentives to encourage agricultural production, especially of the staple crops. From 1985 to 1998, Indonesia started a series of domestic and trade reforms emanating from a combination of unilateral undertakings, the country's commitments to the WTO, and the government's agreement with the IMF following the 1997/98 financial crisis. This study computes nominal protection rates and producer support estimates (NPR and PSE) for Indonesia for the period 1985-2003 for six agricultural commodities, rice, maize, sugar, soybeans, crude palm oil, and natural rubber (representing more than two-thirds of Indonesian agricultural output) in an attempt to quantify the net effects of these policies. The NPRs and PSEs computed for Indonesia show that in spite of the reforms, the GOI has protected its agriculture over the past twenty years, although not uniformly across commodities. Although the reforms went a long way in reducing trade and domestic regulations on agricultural products, the study results demonstrate a return to protection for some commodities in recent years.

Suggested Citation

  • Thomas, Marcelle & Orden, David, 2004. "Agricultural policies in Indonesia," MTID discussion papers 78, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:mtiddp:78
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    References listed on IDEAS

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    1. Gulati, Ashok & Narayanan, Sudha, 2003. "The Subsidy Syndrome in Indian Agriculture," OUP Catalogue, Oxford University Press, number 9780195662061.
    2. Gonzales, Leonardo A. & Kasryno, Faisal & Perez, Nicostrato D. & Rosegrant, Mark W., 1993. "Economic incentives and comparative advantage in Indonesian food crop production:," Research reports 93, International Food Policy Research Institute (IFPRI).
    3. Barbier, Edward B., 1989. "Cash crops, food crops, and sustainability: The case of Indonesia," World Development, Elsevier, vol. 17(6), pages 879-895, June.
    4. Hill,Hal, 2000. "The Indonesian Economy," Cambridge Books, Cambridge University Press, number 9780521663670, October.
    5. Barichello, Richard R., 2000. "Impact Of The Asian Crisis On Trade Flows: A Focus On Indonesia And Agriculture," Policy Harmonization and Adjustment in the North American Agricultural and Food Industry; Proceedings of the 5th Agricultural and Food Policy - 1999 16797, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    6. Mohamad F. Hasan & Michael R. Reed & Mary A. Marchant, 2001. "Effects of an Export Tax on Competitiveness: The Case of the Indonesian Palm Oil Industry," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 26(2), pages 77-90, December.
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    Cited by:

    1. Allan N. Rae, 2007. "Regional agricultural trade liberalization - Priorities for policy makers and future research needs," STUDIES IN TRADE AND INVESTMENT,in: Studies in Trade and Investment - AGRICULTURAL TRADE - PLANTING THE SEEDS OF REGIONAL LIBERALIZATION IN ASIA, volume 60, pages 295-309 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    2. Rakotoarisoa, Manitra A., 2008. "The Impact of Agricultural Policy Distortions on the Productivity Gap: Evidence from the Rice Production," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6154, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Mullen, Kathleen & Sun, Dongsheng & Thomas, Marcelle & Orden, David & Gulati, Ashok, 2004. "Agricultural Policy Interventions In Developing Countries: Mapping The Nature, Degree And Progress Of Reforms," 2004 Annual meeting, August 1-4, Denver, CO 20081, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Cheng, Fuzhi & Orden, David, 2005. "Exchange rate misalignment and its effects on agricultural producer support estimates," MTID discussion papers 81, International Food Policy Research Institute (IFPRI).
    5. Rakotoarisoa, Manitra A., 2006. "Policy distortions in the segmented rice market:," MTID discussion papers 94, International Food Policy Research Institute (IFPRI).
    6. Nguyen, Hoa & Grote, Ulrike, 2004. "Agricultural policies in Vietnam," MTID discussion papers 79, International Food Policy Research Institute (IFPRI).

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