Rice Price Stabilization: Government Solution to Overcome Market Failure and Improve Farmers' Welfare in Indonesia
DOI:
https://doi.org/10.31313/swgt5281Keywords:
Rice price stabilization, Government intervention, Farmers' welfareAbstract
Background: Rice prices in Indonesia often fluctuate due to market failures, such as weak bargaining power of farmers and the dominance of middlemen in the distribution chain. These conditions disadvantage farmers and highlight the importance of government intervention to stabilize prices and improve farmer welfare.
Purpose: This study aims to analyze the role of government intervention in stabilizing rice prices as an effort to address market failures and enhance farmer welfare in Indonesia.
Methods: This study employs a literature review approach by examining various scholarly sources, policy documents, and previous research related to floor price policies, agricultural input subsidies, the strengthening of buffer institutions, and the development of agricultural infrastructure.
Results: The findings indicate that floor price policies provide minimum price guarantees for farmers. Agricultural input subsidies reduce production costs and increase yields. In addition, buffer institutions such as Bulog and farmer cooperatives play a crucial role in absorbing harvests and maintaining supply stability. The development of agricultural infrastructure also contributes significantly to distribution efficiency and increased productivity.
Conclusions: Integrated and consistent government intervention is essential to create a fair, sustainable, and farmer-oriented agricultural ecosystem. Strengthening price policies, improving subsidy effectiveness, and enhancing agricultural infrastructure and institutional capacity are key strategies to support long-term agricultural resilience.
Research Contribution: This study contributes by providing a comprehensive synthesis of various forms of government intervention in rice price stabilization and emphasizing the importance of an integrated policy approach to address market failures and improve farmer welfare in Indonesia.
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