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Fertilizer Subsidies and Food Self-sufficiency in Indonesia

Author

Listed:
  • Peter Warr

    (Australian National University)

  • Arief Anshory Yusuf

    (Department of Economics, Padjadjaran University)

Abstract
Indonesia is a net importer of almost all of its staple foods. National self-sufficiency in food, especially the mainstaple, rice, is a core objective of economic policy. Poverty reduction is also a core policy objective. Since the 1970s, Indonesia has used agricultural input subsidies, especially on fertilizer, to stimulate agricultural production, largely in pursuit of its self-sufficiency goals. Recently, it has alsoused output protection, especially in rice, for the same purpose. This paper utilizes a multi-sectoral, multi-household general equilibrium model of the Indonesian economy to study the trade-offs between the goals of self-sufficiency and poverty reduction when two alternative means are used toachieve them: a fertilizer subsidy, on the one hand, and output protection, on the other. It does this by analyzing the aggregate and distributional effects of these two sets of policies and by comparing their effects with non-intervention. The analysis shows that, in terms of its effects on poverty, a fertilizer subsidy can be a more effective instrument for achieving the goal of rice self-sufficiency than final product import restrictions.

Suggested Citation

  • Peter Warr & Arief Anshory Yusuf, 2016. "Fertilizer Subsidies and Food Self-sufficiency in Indonesia," UNPAD SDGs Working Paper Series 201606, Center for Sustainable Development Goals Studies, Universitas Padjadjaran, revised Jun 2016.
    • Handle: RePEc:unp:sdgspp:201606
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Akhter Ali & Dil Bahadur Rahut & Muhammad Imtiaz, 2019. "Affordability Linked with Subsidy: Impact of Fertilizers Subsidy on Household Welfare in Pakistan," Sustainability, MDPI, vol. 11(19), pages 1-12, September.
    2. Arief Anshory Yusuf & Peter Warr, 2018. "Anti-globalisation, poverty and inequality in Indonesia," Departmental Working Papers 2018-03, The Australian National University, Arndt-Corden Department of Economics.
    3. Yayat Sukayat & Iwan Setiawan & Ukas Suharfaputra & Ganjar Kurnia, 2023. "Determining Factors for Farmers to Engage in Sustainable Agricultural Practices: A Case from Indonesia," Sustainability, MDPI, vol. 15(13), pages 1-14, July.
    4. Zhong, Ling & Nie, Jiajia & Yue, Xiaohang & Jin, Minyue, 2023. "Optimal design of agricultural insurance subsidies under the risk of extreme weather," International Journal of Production Economics, Elsevier, vol. 263(C).
    5. Nguyen, Huy, 2014. "Crop diversification, economic performance and household’s behaviours Evidence from Vietnam," MPRA Paper 59090, University Library of Munich, Germany.
    6. Al Zahra, Windi & van Middelaar, Corina E. & Oosting, Simon J. & de Boer, Imke J.M., 2024. "Nutrient imbalances of smallholder dairy farming systems in Indonesia: The relevance of manure management," Agricultural Systems, Elsevier, vol. 218(C).

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    More about this item

    Keywords

    Indonesia; Fertilizer subsidies; Food self-sufficiency;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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