Identifying factors influencing rice production and consumption in Indonesia

Abdul Bashir,Saadah Yuliana

doi:10.23917/jep.v19i2.5939

Abstract

This study analyzes factors affecting rice production and consumption in Indonesia from 1990-2014, the data source is from Central Bureau of Statistics (BPS). The method used is model of multiple linear regression equation with ordinary least square estimator (OLS). Our findings indicate that rice production can be affected by human capital, labor, wages, wetland, urban population, and rice prices; on the other side, technology has no effect on rice production. Other findings on the rice consumption model were influenced by human capital, per capita income, population, and consumption the previous year, and meanwhile, rice prices has no effect to rice consumption in Indonesia. It’s an important note for the government in making the right program policies such as the development of better irrigation systems, empowering the farmers by providing regular training, subsidizing material inputs to farmers, expanding farmland for farmers. Meanwhile, the government needs to create policy such as food diversification, price stabilization security, the increase of rice stock, and other agricultural policies.

Highlights

Rice food is the most basic human need, so the availability of rice for the community must always be guaranteed (Clapp, 2017; Timmer, 2013)
The dependent variables used by rice production (QR) and rice consumption per capita (CRP), while those used as independent variables include: per capita income (GDPC); human capital (HC); population (POP); urban population (URB); labor (L), wage level (WF); rice price (PRR); wetland area (LA); and agricultural technology (T)
The rice production model in the study enter the rice price factor, and the results show that price developments have a significant effect on rice production in Indonesia, statistically indicating that if the price of rice increases by 1%, it will increase rice production by 0.101% in a year

Summary

Introduction

Rice food is the most basic human need, so the availability of rice for the community must always be guaranteed (Clapp, 2017; Timmer, 2013). Rice is one of the most important staple foods in the world (Fairhurst & Dobermann, 2002). This statement is applicable in Asia, where rice is the staple food for the majority of the population at the middle to low level. Increasing rice food security is a key development priority, as rice food is the most basic need for humans (Clarete et al, 2013; FAO, 2009). Increasing population growth requires the availability of food from agricultural products sufficient to strengthen food security in a region (Clapp, 2017), this is because rice food security has a central position in increasing productivity and improving the quality of life of citizens

Objectives

Methods

Findings

Discussion

Conclusion