Does soybean production in indonesia still have competitiveness advantages? a policy analysis matrix approach

Abstract

The soybean production in Indonesia still faces several challenges causing production depended on import supplies. This paper aims to assess the competitiveness advantages of soybean production. Policy Analysis Matrix (PAM) was used to examine its competitiveness using secondary data and deliberating results of previous studies. The results of the study in 2015 showed that domestic production still could afford private and social prices. Soybean nearly did not show competitiveness advantages reflected from the ratio of DRC and PCR that were almost one. The government interventions brought various impacts, for instance farmers paid cheaper inputs by 26.67% and there was inefficiency of government policy towards the output. The government policy to assure profit in the long term was also insufficient reflected from the EPC (1.03) and PC (0.06). From the SRP variable, it described that the government not all farmers received a benefit from the government policy. The sensitivity analysis resulted: (i) the combination of increasing soybean price + procurement price at 8,000 IDR/kg and (ii) the increasing import tariff by 5% + procurement price at 8,000 IDR/kg provided the most favorable impacts.