The Impact of Rice Price on Coconut Farmer Household Consumption in Indragiri Hilir Regency Program

Elinur, Elinur and Asrol, Asrol (2016) The Impact of Rice Price on Coconut Farmer Household Consumption in Indragiri Hilir Regency Program. In: Strengthening Indonesia Agribusiness:Rural Development and Global Market Linkages, 25-26 April 2016, Interntional Convention Center Bogor-Indonesia.

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Abstract

Rice is dominant staples food for most of Indonesias. Instability of rice price affects to its consumption by society, including coconut farmers households. The objective of this research is to analyze price elasticity on household consumption and analyze the impact of rice price and coconut farmers’ income on their rice consumption. This research was carried out through survey. Sampling was conducted through simple random sampling of 40 people. Method of data analysis used was econometric; single equation. Results of this research revealed that, first: price elasticity of rice and cassava was responsive to household rice consumption. This indicated that price changed of rice and cassava affecting significant change in rice consumption of coconut farmer households. Second, 10 percent increasing in rice and cassava price showed negative impact, whereas the increase of household income showed positif impact on rice consumption of coconut farmer households. Combination of rice price and farmers income in the same proportion result negative impact on household rice consumption. This indicated that income increase could not eliminate thr negative impact of rice price increase. These findings imply that stabilization policy of rice price was better of coconut farmers than increasing income policy.

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