Analysis of the Protection of Input Subsidies Policy (Fertilizer and Seed) and Production Output in Rice Plant Agriculture in Indonesia

Adi Poernomo

doi:10.20884/1.erjpe.2017.12.1.1069

Analysis of the Protection of Input Subsidies Policy (Fertilizer and Seed) and Production Output in Rice Plant Agriculture in Indonesia

Adi Poernomo

Abstract

The background of this research was on policy issues of continuing increased subsidies for fertilizer and seed rice from year to year, which was also faced the problem of inefficient economic and government budget allocations, the price disparity between input and output and its derivatives result and also the creation of unreal competitiveness as a result of the use of subsidized inputs. This study aims to determine the “protection coefficient” of subsidized inputs (fertilizer and seeds) and output in agriculture rice plants in Indonesia. Policy Analysis Matrix (PAM) is used to analyze the impact of subsidies on rice crop farming system in Indonesia. The analysis result of the Policy Analysis Matrix (PAM), shows that (1) the rice farming system has the profit of market prices and social prices, (2) government policies are simultaneously protective to the production capability, (3) It has a competitive and a comparative advantage.

Keywords: Subsidies on Fertilizer and Rice Seeds, Protection Coefficient, The Policy Analysis Matrix.

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DOI: https://doi.org/10.20884/1.erjpe.2017.12.1.1069