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Risks and spatial connectivity evidence from food price crisis in rural Indonesia

Futoshi Yamauchi () and Reno Dewina

Food Policy, 2012, vol. 37, issue 4, 383-389

Abstract: This paper examines the impact of the agricultural commodity price surge globally experienced in 2007/2008 and thereafter on income growth of agricultural producers and non-producers using recent panel data from Indonesia. First, during this period, producers experienced significantly higher earnings and total income growth than non-producers (narrowing their income gap). Second, the negative effect on non-producers’ real incomes was smaller in spatially well-connected areas, where, to mitigate the impact, private transfers (such as remittances) as well as employment incomes increased among non-producers. In contrast, government programs did not effectively cushion the income shock. Therefore, informal insurance was more effective than formal government-funded social protection programs to mitigate the crisis shock.

Keywords: Food price crisis; Spatial connectivity; Private transfers; Indonesia (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1016/j.foodpol.2012.03.007

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Handle: RePEc:eee:jfpoli:v:37:y:2012:i:4:p:383-389