Abstract
This study aims to acknowledge and find empirical evidence of the effect of food crop production on gross domestic product and producer prices on cost insurance, freight, imports and free on board. The data analysis method used in this research is Partial Least Square (PLS) analysis. The results of this study indicate that the production of food crops has no positive effect on cost insurance and freight imports. Gross domestic product does not have a positive and significant effect on import freight insurance costs. Producer prices do not have a positive and significant effect on import freight insurance costs. Food crop production has a positive and significant effect on free on board. Gross domestic product has no and significant effect on free on board. The producer price has a positive and significant effect on free on board. Import cost insurance and freight does not have a positive and significant effect on free on board. Production of food crops is not significant to free on board through import freight insurance costs. Gross domestic product is not significant to free on board through import freight insurance costs. Producer prices are not significant to free on board through import freight cost insurance. KEY WORDS Food crop production, gross domestic product, producer prices, import cost insurance freight, free on board.
Highlights
The agricultural sector has an important role in Indonesia's economic growth by directly providing food for the people, contributing to the formation of the national Gross Domestic Product (GDP), absorbing labor, generating foreign exchange, and functioning in controlling inflation
This study seeks to explain the causal relationship between variables to determine whether there is a relationship between food crop production, gross domestic product, and producer prices on cost insurance freight and free on board in Indonesia
The coefficient value of the food plant production parameters to free on board is -0.307 with a negative direction. This means that the greater the production of food crops, the greater the level of free on board
Summary
The agricultural sector has an important role in Indonesia's economic growth by directly providing food for the people, contributing to the formation of the national Gross Domestic Product (GDP), absorbing labor, generating foreign exchange, and functioning in controlling inflation. Trade conditions in the agricultural sector indicate that the Indonesian economy is increasingly open and foreign trade activities through import and export activities are increasing. Total production of cassava and maize in Indonesia in 2019 was around 54.60 million tons of GKG, or a decrease of 4.60 million tons (7.76 percent) compared to 2018. Domestic production in the agricultural sector is related to the production of food crops, goods and services used both for consumption and for capital formation, do not all come from within the country but some come from abroad. It is called Regional Expenditure, namely the amount of consumption expenditure made by households, non-profit organizations, the government, gross fixed capital formation, changes in inventory and net exports of an area within a certain period (one year)
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