Analysis of Corn Supply in Indonesia

Abstract

Corn is an important food commodity in Indonesia. Corn production in Indonesia is influenced by various factors, including price, land area, soybean price, subsidized NPK fertilizer price, post-harvest agricultural machinery assistance, and imports. This study aims to analyze the level of elasticity of corn commodities on the supply side. The results of the analysis show that corn supply in Indonesia is inelastic to the price, land area, and price of soybeans. However, corn supply is elastic to subsidized NPK fertilizer prices, post-harvest agricultural machinery assistance, and imports. The supply elasticity to the price of corn is 0.408, which means that if the price of corn increases by 1%, then the supply of corn will increase by 0.408%. The supply elasticity to land area is 1.578, which means that if land area increases by 1%, then corn supply will increase by 1.578%. The supply elasticity to soybean prices is -0.309, which means that if soybean prices increase by 1%, then corn supply will decrease by 0.309%. The supply elasticity to the price of subsidized NPK fertilizer is -0.016, which means that if the price of subsidized NPK fertilizer increases by 1%, then the supply of corn will decrease by 0.016%. The supply elasticity of post-harvest agricultural machinery assistance is 0.048, which means that if post-harvest agricultural machine tool assistance increases by 1%, then corn supply will increase by 0.048%. The elasticity of supply to imports is 0.232, which means that if corn imports increase by 1%, then corn supply will increase by 0.232%.