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Who is benefiting from fertilizer subsidies in Indonesia ?

Author

Listed:
  • Osorio, Camilo Gomez
  • Abriningrum, Dwi Endah
  • Armas, Enrique Blanco
  • Firdaus, Muhammad

Abstract

Using the Agricultural Census 2003 and the Rice Household Survey 2008 for Indonesia, this paper analyzes the distribution of benefits from fertilizer subsidies and their impact on rice production. The findings suggest that most farmers benefit from fertilizer subsidies; however, the 40 percent largest farmers capture up to 60 percent of the subsidy. The regressive nature of the fertilizer subsidies is in line with research carried out in other countries, the result of larger farms using a larger volume of fertilizer. This paper confirms that fertilizer used in adequate quantities has a positive and significant impact on rice yields, but it also provides evidence that over-using fertilizer has an adverse impact on yields (an inverted U-curve relationship).

Suggested Citation

  • Osorio, Camilo Gomez & Abriningrum, Dwi Endah & Armas, Enrique Blanco & Firdaus, Muhammad, 2011. "Who is benefiting from fertilizer subsidies in Indonesia ?," Policy Research Working Paper Series 5758, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5758
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    References listed on IDEAS

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    1. Ramon Lopez, 2004. "The Structure of Public Expenditures, Agricultural Income and Rural Poverty: Evidence from 10 Latin American countries," Econometric Society 2004 Latin American Meetings 343, Econometric Society.
    2. Ramón López, 2004. "Effect of the Structure of Rural Public Expenditures on Agricultural Growth and Rural Poverty in Latin America," IDB Publications (Working Papers) 50958, Inter-American Development Bank.
    3. Keith Fuglie, 2004. "Productivity growth in Indonesian agriculture, 1961-2000," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 40(2), pages 209-225.
    4. Dorward, Andrew & Chirwa, Ephraim & Kelly, Valerie A. & Jayne, Thomas S. & Slater, Rachel & Boughton, Duncan, 2008. "Evaluation Of The 2006/7 Agricultural Input Subsidy Programme, Malawi. Final Report," Food Security Collaborative Working Papers 97143, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    2. 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.
    3. World Bank, "undated". "East Asia and Pacific Economic Update, April 2017," World Bank Other Operational Studies 26332, The World Bank.
    4. Livia Bizikova & Stefan Jungcurt & Kieran McDougal & Carin Smaller, 2017. "Effective Public Investments to Improve Food Security," Working Papers id:12324, eSocialSciences.

    More about this item

    Keywords

    Fertilizers; Crops&Crop Management Systems; Economic Theory&Research; Regional Economic Development; Rural Poverty Reduction;

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