This paper examines episodes of capital bonanzas and sudden stops in Indonesia by utilising binary response models and several episode-identification approaches. Our identification suggests that whenever bonanza episodes occurred, capital sudden stop episodes followed in a more extended period. The estimations demonstrate that domestic factors are relatively dominant in determining the capital bonanzas, and the federal funds rate has a more significant impact on inducing the probability of capital sudden stops in Indonesia. We also found that Turkey and South Africa are the most contagious economies for Indonesia. This paper proposes some policy reforms to enhance the stability of capital inflows in Indonesia, including financial regulation and public finance policies such as a reverse Tobin tax and market-driven public debt rules.

In contrast to previous studies that mostly focused on the winners and losers of the US–China trade war, this study investigates the poverty and income distribution impact of the trade dispute in a developing country, using Indonesia as a case study. Employing a dynamic, computable general equilibrium model that is multi-region and multi-household, this study found that the trade war increases households’ real income and reduces poverty in Indonesia. The impact of the trade war, which is channeled into the Indonesian economy via trade diversion, improves the country’s terms of trade and eventually increases the returns of primary factors owned by households. However, Indonesia’s income inequality might increase as the rise in real income of upper-income households exceeds the rise in real income of lower-income households. The policy measures introduced by Indonesia to take advantage of the trade war might lower poverty incidence further and alter the impact of negative income distribution from the trade war.

Food price volatility broadly impacts the country’s food security. Rice price stabilization in Indonesia is carried out by BULOG, the food state-owned enterprise (SOE) that the WTO has identified as Indonesia’s state trading enterprise (STE). This study was conducted to evaluate the price stabilization program in Indonesia by reviewing the efforts that have been made and analyzing the factors that influence the price of rice at the consumer level using Autoregressive Distributed Lag (ARDL) analysis. The analysis showed that BULOG’s market share affected consumer-level rice prices with a negative coefficient sign, which means that the larger BULOG’s market share, the lower the price of rice will be. Other variables that affect the price of rice at the consumer level are the price of rice itself at the previous time lag, the producer-level paddy price, rice production, rice consumption, and BULOG’s operational rice stock. On the basis of the results of these studies, to realize the stabilization of rice prices in Indonesia, the government can complement stock management through a public policy approach with market-approach-based policies by optimizing the role of Food SOEs as market players in the rice industry.

This paper presents coffee producers’ subjective perceptions of voluntary sustainability standards (VSS) programs across southern Sumatra, a global center for Robusta coffee production. Household surveys and a series of farmer interviews revealed that producers generally had positive perceptions of these programs. Despite positive perceptions, the standards had little impact on yield or household incomes. This apparent paradox is explained by improved social networks and social capital, which were seen as important for broader livelihood security. Producers believed that VSS facilitated access to material support and increased knowledge exchange. This builds both bonding and bridging social capital, all with minimal disruption to the low-input system of coffee production that fits within farmers’ broader livelihood strategies. Our approach highlights the challenges that impact assessments (including applications of the living income concept) face when seeking to establish ostensibly objective measures of well-being.

This study aims to analyze: (1) pepper farming income (2) income and economic transformation of pepper farmer’s households. This research was conducted in 3 districts that were chosen purposively because these locations are the main black pepper producers in Lampung Province. There were 100 farmer respondents and were taken by simple random sampling method. Data collection was carried out from April to September 2020. The analytical method used was farming analysis and farmer household income. The results showed that pepper farming activities in Way Kanan, North Lampung, and East Lampung Regency were profitable to cultivate because the RC ratio was more than one, the economic income of farmer’s households came from on farm pepper, on farm non pepper, non-farm and off farm.

BACKGROUND AND OBJECTIVES:

The Indonesian Government is promoting sorghum as an alternative commodity to substitute wheat. The cultivation of this commodity on dryland is initiated in forestry areas through social programs. This study aimed to analyze the economic feasibility, perception of farmers, and environmental sustainability of sorghum-eucalyptus agroforestry in Majalengka.

METHODS: 

This study innovatively combined qualitative and quantitative methods to assess economic, social, and environmental aspects across five dimensions, namely business organization, actors, working mechanisms, economic impacts, and sustainability of business and environment. Data were collected through focus group discussions and interviews with questionnaires, containing 5 dimensions and 23 attributes. The data collected were analyzed using the revenue-cost ratio, Likert scale, and scoring formulation, as well as multi-dimensional scale method. The level of environmental sustainability status and leverage attributes were examined using the Rapfish program and Monte Carlo analysis.

FINDINGS: 

Sorghum-eucalyptus agroforestry was economically feasible with a revenue-cost ratio value higher than one. Farmers’ perceptions regarding the five dimensions of sorghum-eucalyptus were positive except for the operational mechanisms, and business and environmental sustainability. A distinfuished area of unfavorable perception was the use of sorghum waste as a substrate for renewable energy. The environmental sustainability index for sorghum-eucalyptus agroforestry was categorized as low except for the economic (61.9) and actor (52.3) which attained the moderately sustainable. The results showed that the sustainability analysis using multi-dimensional scale could be used as a guide in formulating strategies for enhancing and developing sorghum-eucalyptus agroforestry in the future.

CONCLUSION: 

The problems in this study were related to the institutional governance of agroforestry business. The inclusion of the community, government, and private sector was unequal in carrying out  the sustainability function of each dimension. The challenge for the future was proper and sustainable management of development efforts to realize economic sustainability, add value for society, and ensure environmental sustainability in agroforestry areas.

The Covid-19 pandemic has shocked the demand and supply of food product leading to large price fluctuations in the market not only at the national level but also at the regional level. This paper examines the existence of structural break and the volatility of chicken meat prices in six main islands in Indonesia by using additive outlier and ARCH-GARCH models. During the Covid-19 outbreak in Indonesia, the structural break in the chicken meat prices occurred in the six islands. There were variations in terms of the timing of the structural break where Kalimantan and Java island experienced the fastest structural break. Further examinations showed that after the structural break time, the prices of chicken meat in Sumatera, Java, Sulawesi and Papua tended to increase. Meanwhile, the prices of chicken meat in Kalimantan and Bali-NT tended to decline after the break time. The Covid-19 pandemic had a significant impact on chicken meat prices in Java and Bali-NT. The results have important implications for local and central governments that are still under the Covid-19 crisis on how to attain price stabilisation of regional chicken meat prices during the Covid-19 pandemic.

The Government of Indonesia has been promoting the advancement of the biodiesel sector to fulfill its commitment to support clean energy, energy security, and rural development. This paper examines the economic impact of the biodiesel sector using a computable general equilibrium model. Besides analyzing the impacts on the national macroeconomic conditions, other sectors, and household incomes, our model has also included a regional block to capture the impact of the biodiesel mandate on regional growth. Two simulations were performed: (1) fulfillment of the 30% biodiesel blending target (B30 mandate), and (2) Simulation 1 combined with the European Union’s biodiesel trade ban resulting in an export reduction of 5.18%. The results show that the two simulations provide positive impacts on macroeconomic variables, including real gross domestic product and real wages. However, the B30 mandate and the combined effect of the EU trade ban still yield an inflationary effect in the short term. They also potentially reduce the production of several agricultural products—such as sugarcane, fruits, vegetables, and soybeans—leading to an increase in food prices. The policy implications highlight that the current B30 mandate and EU ban cannot automatically improve the fuel trade balance.

Beef has been seen as one of the strategic commodities in Indonesia. As the awareness of people to protein consumption increasing, demand for beef and its prices are also rising. However, the rising consumer price of beef is not followed by the increasing price of beef at the producer level. Therefore, the objective of this study is to analyze the transmission of beef prices at the consumer and producer level. This study used secondary data from the Agency for Central Statistics of Indonesia. The data used were the consumer and producer prices of beef from 2008 to 2016. The data were analyzed using the Vector Error Correction Model (VECM). The results show that the prices of beef at the consumer and the producer level are asymmetric and have uni direct relationships. The consumer prices of beef influence the producer prices of beef and not vice versa. It is recommended for the Government to formulate policies that could facilitate transparent information for every actor along the beef market chain. In the long-run, the Government needs to increase the population of domestic cattle and give incentives to domestic cattle farmers with large business scales.

Beef is one of the strategic livestock commodities in Indonesia. As demand increases, the price of beef increases and tends to be volatile. The increased volatility in beef prices could influence production decision and the supply of beef. This study aimed to investigate the price volatility and the impact of price volatility on the supply response of beef in Indonesia. This study used secondary data obtained from various related institutions. Volatility was estimated using the GARCH (p,q) model and the supply response model using OLS model. The empirical results indicated that among the estimated GARCH models, the GARCH (2,3) seemed to be particularly appropriate to describe the beef price supply response. Beef price volatility in Indonesia was found to be low and persistent in the long run. Price uncertainty appeared to have a substantial negative effect on Indonesian beef production. The slow adjustment of farmers to demand and supply shocks indicate the importance of import as a temporary policy to fulfill the demand of beef in the short and medium-run.

The diverse sources of agricultural extension information do not guarantee increased farmers’ capabilities to adopt agricultural innovations. Consequently, efforts to accelerate the adoption of agricultural innovations should pay particular attention to farmers’ compatibility with different information sources. This study aims to analyze farmers’ perceptions of various information sources about rice commodity innovations and determine the information sources influencing farmers’ capabilities in adopting rice innovations. The study was conducted from June to December 2019 through a structured survey approach with 270 rice farmers in Subang, West Java and Boyolali, Central Java, Indonesia, by using structural equation model analysis. The results showed that rice farmers had positive perceptions of government, private, and self-subsistent extension. The capability level of rice farmers showed that all indicators were significantly different. Farmers could improve their capabilities and sustainability of rice farming by adopting agricultural innovations. Information from government and private extension providers had a positive effect on the capacity and capability of rice farmers. The role of self-subsistent extension was more of a facilitator and did not directly affect the capacity and capability of farmers. Participatory extension activities are recommended as a form of intervention that can improve rice farmers’ capacity and capability in terms of technology adoption processes. The extension activities should be provided as a series, rather than one-off events, so that farmer knowledge accumulates over time through a style and pace to match their skills and level of education.