How much does rice price influence milled paddy price? Analysis of price integration in Indonesia
Journal Title: Archives of Business Research - Year 2017, Vol 5, Issue 3
Abstract
This study analysis how much the price of rice influences the price of milled paddy. The results can aid in policy suggestions related to the price of rice. If the price of rice has a big impact on the price of milled paddy, increasing rice prices could be an effective policy to increase the price of milled paddy. This would desire farmers to increase production and create food security. If is the little effect, this policy would not be effective. The impact of this policy might harm consumers and increase poverty. The analysis was carried out using price integration and data from Indonesia. The data were taken from January 1, 2007, to December 31, 2014. The results show that rice prices influence the price of milled paddy, but not proportionally since increases in milled paddy price are always lower than increases in rice prices. Thus, increasing the price of rice to increase the price of milled paddy to help the farmers is not effective because it does not substantially increase farmer income and will not be effective for stimulating production. This phenomenon occurs because for many farmers (especially small farmers), the market structure is nearly a monopsony market. As a suggestion for make increasing rice prices more effective, the government could intervene via Indonesian logistics Bureau to make the market more competitive. This intervention could create competition for traders in the monopsony market.
Authors and Affiliations
Yogi Makbul, Sudrajati Ratnaningtyas
Keywords
Related Articles
- EP ID EP313990
- DOI 10.14738/abr.53.2954.
- Views 88
- Downloads 0
Consumers’ Willingness To Pay For Safe Beef In Ibadan-North Local Government, Oyo State, Nigeria
Beef demand among urban dwellers in Nigeria has grown overtime with increasing concerns for safety. Beef is commonly sold in open stalls where the risk of contamination is very high. Increasing the quality of beef and ot...
A Diletto and his Storytellig Strategy
The strategy of involving consumers and prospects through tales or stories in advertising, known as storytelling, has been widely used by organizations and well accepted by the general public. One of the companies that b...
Assurance of Learning and Assessment at the Business Degree Program and Major Levels
This study presents one business school’s experiences in simultaneously undergoing the accreditation processes of both the Association to Advance Collegiate Schools of Business International (AACSB) and the Middle States...
Determinants of Non-Performing Loans in Nigeria’s Deposit Money Banks
The study examines the relationship between bank specific and macroeconomic determinant of non-performing loans in Nigerian deposit money banks over the period of 5 years (2010 to 2014). A sample of 10 banks out of 15 qu...
The Impact of Information and Communication Technology (ICT) Development on Economic Growth in Sudan: An Application of ARDL Bounds Testing Approach
The aim of this study to investigates the impact of Information and Communication Technology (ICT) development on economic growth in Sudan. Annually data over the period (1980-2014) of economic growth (GDP), Information...