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International food prices and poverty in Indonesia

Peter Warr () and Arief Yusuf ()

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: This paper argues that recent increases in international food prices worsened poverty incidence in Indonesia, even though many poor farmers benefited. This conclusion is based on the application of a multi-sectoral, multihousehold general equilibrium model of the Indonesian economy. The positive effect on the welfare of poor farmers was exceeded by the negative effect on poor consumers. Indonesia’s ban on rice imports since 2004 complicates this account. The import ban shielded Indonesia’s internal rice market from the temporary world price increases from 2007 to 2008, but did so at the expense of permanently increasing both rice prices and poverty incidence.

Keywords: Indonesia; food prices; poverty incidence; general equilibrium modeling (search for similar items in EconPapers)
JEL-codes: D58 F14 I32 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2009
New Economics Papers: this item is included in nep-agr, nep-dev and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2009-19

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