IMPACT OF MARKET LIBERALIZATION ON NATIONAL FOOD SECURITY AND RICE MARKETING IN INDONESIA

Mahdi , Mahdi and Hakimi , Rini and Sari , Rina (2015) IMPACT OF MARKET LIBERALIZATION ON NATIONAL FOOD SECURITY AND RICE MARKETING IN INDONESIA. In: 3rd International Conference Sustainable Agriculture, Food and Energy , 17-19 November 2015, Ho Chi Mhin.

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Abstract

Liberalization policy affects Indonesia’s national rice market through changes in policies on rice farming and marketing. This paper studies the responses of rice agribusiness actors to the changes by analizing changes in marketing channels and its efficiency. Changes in structure-conduct-performance (SCP) analysis is carried out for Kerinci district of Jambi province and Solok district of West Sumatra province. In-depth interview has been carried out to rice traders at all marketing channels and levels in both districts. Research results show that liberalization of rice market, then called managed market mechanism, proofly strengthennational food security. Indonesia’s rice economy was likely less affected against global rice market fluctuation. Domestic market structure is improved due to increasing number of market actors at all marketing levels with low heterogeneity. However, both market conduct and performance are not significantly improved. Quality standard and controlling institution are still absence at farmers and collecting traders level. Price fluctuation is likely more frequence and sharpher at present than before liberalization took place.In addition, marketing margin increased and big traders got more benefit. Therefore, for market structureconduct-performance improvement, we need to formulate quality standard and to establish its controlling institution especially at farmers and collecting traders level. We also need to empower farmer groups and involve them in rice marketing channels. Finally, we have to encourage farmers to plant for whole years to reduce price fluctuation.

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