Volatility of world rice prices, import tariffs and poverty in Indonesia: a CGE-microsimulation analysis
This study aims at measuring the impact of world price volatility and import tariffs on rice on poverty in Indonesia. Applying a Computable General Equilibrium-Microsimulation approach and the endogenous poverty line, this study found that the volatility of world rice prices during 2007 to 2010 had a large effect on the poverty incidence in Indonesia. The simulation result showed that a 60 per cent increase in world rice price raises the head count index by 0.81 per cent which is equivalent to an increase in the number of poor by 1,687,270. However, both the 40 per cent decrease in the effective import tariffs on rice enacted by regulation No.93/PMK.011/2007 and the zero import tariffs implemented by regulation No. 241/PMK.011/2010 in response to high world rice prices could not perfectly absorb the negative impact of increasing world rice prices on poverty. The 40 per cent decrease in the effective import tariffs on rice reduced the head count index by 0.08 per cent equal to 161,546 people while the zero import tariffs on rice reduced the head count index by 0.19 per cent equal to 390,160 people. These policies might not be enough to absorb the negative impact of an increase in world rice prices from 2007-2010, because, during this period, the world rice prices increased on average by almost 71 per cent, which have impoverished approximately two million people. Moreover, protection in the agricultural sector, such as raising import tariffs, intended to help agricultural producers will have the reverse effect of raising the head count index.
|Date of creation:||Dec 2010|
|Date of revision:|
|Publication status:||Published in Economics and Finance in Indonesia Vol.52.No.3(2010): pp. 335-364|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Cezary A Kapuscinski & Peter G Warr, 1996.
"Estimation of Armington Elasticities: An Application to the Philippines,"
Departmental Working Papers
1996-08, The Australian National University, Arndt-Corden Department of Economics.
- Kapuscinski, Cezary A. & Warr, Peter G., 1999. "Estimation of Armington elasticities: an application to the Philippines," Economic Modelling, Elsevier, vol. 16(2), pages 257-278, April.
- Cezary A. Kapuscinski & Prof Peter G. Warr, 1996. "Estimation of Armington Elasticities: An Application to the Philippines," Trade and Development 96/8, Australian National University, Department of Economics.
- Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank.
- Luc Savard, 2003. "Poverty and Income Distribution in a CGE-Household Micro-Simulation Model: Top-Down/Bottom Up Approach," Cahiers de recherche 0343, CIRPEE.
- B. Decaluwé & L. Savard & E. Thorbecke, 2005. "General Equilibrium Approach for Poverty Analysis: With an Application to Cameroon," African Development Review, African Development Bank, vol. 17(2), pages 213-243.
- Maros Ivanic & Will Martin, 2008. "Implications of higher global food prices for poverty in low-income countries-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 405-416, November.
- Warr, Peter G. & Yusuf, Arief Anshory, 2010.
"International food prices and poverty in Indonesia,"
2010 Conference (54th), February 10-12, 2010, Adelaide, Australia
59259, Australian Agricultural and Resource Economics Society.
- 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.
- Warr, Peter G., 2005.
"Food policy and poverty in Indonesia: a general equilibrium analysis,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 49(4), December.
- Peter Warr, 2005. "Food policy and poverty in Indonesia: a general equilibrium analysis ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 429-451, December.
- Peter Warr, 2005. "Food Policy And Poverty In Indonesia: A General Equilibrium Analysis," Departmental Working Papers 2005-03, The Australian National University, Arndt-Corden Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:31451. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.