World food prices and poverty in Indonesia

Warr, Peter; Yusuf, Arief Anshory

doi:10.1111/1467-8489.12015

Cited by 58 publications

(51 citation statements)

References 11 publications

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“…This research is supported by another study conducted by Warr and Yusuf (2013). The results of that study have indicated that an increase in the price of rice will increase poverty in both rural and urban areas.…”

Section: Discussionsupporting

confidence: 63%

The effect of Market structure on the integration of rice prices with paddy prices and its impact on farmers family income in the Kroya district, indramayu regency, Indonesia

Makbul¹,

Pradono²,

Ratnaningtyas³

et al. 2015

jda

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One way to increase the paddy farmers family incomes is to increase the rice price. This is based on the assumption that the increase in the rice price will subsequently increase the paddy price, which, in turn, will increase the family incomes of paddy farmers. This assumption is valid when there is integration between the rice and paddy prices; such integration occurs within a free and competitive market structure. This study aims to find evidence that the market for farmers with small areas of land is not a "free and competitive market" but a "monopsony", in which increases in rice prices will not increase the farmers family incomes. This is an important scientific finding for suggestion in food policy. The research method is survey, with proportional stratified random sampling. The objects research is small farmers, medium farmers and large farmers in Kroya subdistrict, Indramayu Regency, Indonesia. The reason for choosing this area is this area is ultimate producers paddy in Indonesia. After calculation from minimum number sample formula, then number sample for small farmers is 48, for medium farmers is 39, and large farmers is 16 farmers. The analysis for rice price integration with paddy price is regression analysis, if regression estimate is significant it can be concluded the paddy price is influenced by rice price. Paddy price to farmers family income impact Analysis is done by a difference test, between the rice prices, before and after the increases in the prices. If farmers income is different it be concluded the rice price have an impact to farmers family income. The research finding is, for the small farmers, their paddy price is not influenced by the market rice price. The market structure for small farmer is a near monopsony. The paddy price influenced by the rice price is only for middle and large farmers. The free and competitive market structure is only for the large farmers. It is only large and middle farmers feels the impact of rice price to farmers family income ; In another hand, the increase of rice price do not have such an impact for family incomes of the small farmers. The reason for it, is because revenue from the increasing paddy price do not cover the increasing of family expediture from the increasing rice price. The policy implication from this research sugest is, the policy of increasing rice price to increasing farmer's family income is a bad policy. This is because the policy increasing rice don't affect for small farmer's family income. The increasing rice price only affect for middle and larger farmer's 218 family income. According BPS (2014), 57 percent farmer's in Indonesia is a small farmers, that mean increasing rice price only increasing less a half number of farmer's family income income in Indonesia.JEL Classifications: O20, O13, F63

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Section: Discussionsupporting

confidence: 63%

The effect of Market structure on the integration of rice prices with paddy prices and its impact on farmers family income in the Kroya district, indramayu regency, Indonesia

Makbul¹,

Pradono²,

Ratnaningtyas³

et al. 2015

jda

View full text Add to dashboard Cite

show abstract

“…The database was consolidated from three key data sources: (a) the 2008 I-O Table; (b) the 2008 SAM; and As the SAM has only 10 household categories, these were expanded by incorporating information from SUSENAS 2008 using data on 200 households' (100 rural and 100 urban) family size, income, and expenditure patterns on goods and services. This is based on the procedures set out in the PHILGEM model which uses the integrated multi-household method (see Corong and Horridge 2012;Warr and Yusuf 2014 for details). Poverty incidence in the model was measured using the headcount ratio while income inequality was measured using the Gini ratio.…”

Section: The General Equilibrium Model and Tourism Policy Simulationsmentioning

confidence: 99%

How Pro-Poor and Income Equitable Are Tourism Taxation Policies in a Developing Country? Evidence from a Computable General Equilibrium Model

Mahadevan

Amir

Nugroho

2016

Journal of Travel Research

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This article highlights the impacts on poverty, income inequality, and the macroeconomic and sectoral output resulting from increases in the value-added tax and sales tax on hotels and restaurants using Indonesia as a case study. While taxing tourism-related sectors was ineffective in reducing poverty and income inequality, using tax revenue from the value-added tax as a cash transfer policy was effective and more so in rural Indonesia. Tax revenue used for infrastructural development was however limited in its impact on poverty and income distribution. Overall, the negative effects of taxation on various industries and the contraction of GDP and employment in the economy need to be mitigated. This can be done with an appropriate policy mix for the use of tax revenue between cash transfers and expenditure in education and health, with the view to address potential resource misallocation and output contraction in other industries.

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“…The SAM price model was linked to poverty using the multi‐household method. Households are grouped into 20 subcategories arranged based on expenditure per capita (10 urban categories and 10 rural categories) (see Warr & Yusuf ). The poverty incidence measured by the headcount ratio for each subcategory was determined using the following equation:

P (y_{d e c}^{r}, y_{v}) = \max {d e c | y_{d e c}^{r} \leq y_{v}} + \frac{y_{v} - \max {y_{d e c}^{r} | y_{d e c}^{r} \leq y_{v}}}{\min {y_{d e c}^{r} | y_{d e c}^{r} \geq y_{v}} - \max {y_{d e c}^{r} | y_{d e c}^{r} \geq y_{v}}},

where dec = 1, …, 10 decile of expenditure per capita;

P

is poverty incidence

y_{d e c}^{r}

; is real expenditure per capita of a household of the dec‐ th decile, and

y_{v}

is poverty line.…”

Section: Methodsmentioning

confidence: 99%

“…Therefore, this study used 47 production sectors presented in Table 1. In extending the Indonesian SAM, the procedures developed by Lewis (1993), Hartono and Resosudarmo (2008), Warr and Yusuf (2014), Endriana et al (2016), and Hartono et al (2017) were replicated.…”

Section: Datamentioning

confidence: 99%

See 1 more Smart Citation

Impacts of Food Prices on the Economy: Social Accounting Matrix and Microsimulation Approach in Indonesia

Misdawita

Hartono

Nugroho

2019

Rev Urban & Reg Develop

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This study investigated the impacts of increasing the prices of heavily protected food commodities in Indonesia on producer and consumer prices. It also evaluated the changes in household living expenses and poverty. The Indonesian Food Social Accounting Matrix was developed along with a price multiplier matrix–microsimulation approach that was used to analyze problems. Poor rural households were the most negatively affected by the increments in food prices. This result contrasted with the standard political argument stating that high rice prices will decrease poverty, particularly in rural areas where the poor live or work as farmers. Of all the food commodities observed, the changes in the rice prices had the most substantial impact on both producer and consumers price, as well as the households’ living cost, particularly low‐income households. Therefore, an increase of 25% in rice price will raise urban, rural, and national poverty levels by 0.13%, 0.10%, and 0.11%, respectively.

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World food prices and poverty in Indonesia

Cited by 58 publications

References 11 publications

The effect of Market structure on the integration of rice prices with paddy prices and its impact on farmers family income in the Kroya district, indramayu regency, Indonesia

The effect of Market structure on the integration of rice prices with paddy prices and its impact on farmers family income in the Kroya district, indramayu regency, Indonesia

How Pro-Poor and Income Equitable Are Tourism Taxation Policies in a Developing Country? Evidence from a Computable General Equilibrium Model

Impacts of Food Prices on the Economy: Social Accounting Matrix and Microsimulation Approach in Indonesia

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