Food Policy and Poverty in Indonesia: a General Equilibrium Analysis

Indonesia is the world’s largest importer of its staple food, rice. This commodity accounts for large shares of both consumers’ budgets and total employment. Since the economic crisis of 1998, rice import policy has become increasingly protectionist and since early 2004, imports have been officially banned. Advocates of this policy have claimed that by raising domestic rice prices it reduces poverty because it assists poor farmers. Opponents have said it increases poverty, stressing negative effects on consumers.