The Impact of The Combination of Government Purchase Price Policies on The Well-Being of Rice Farmers in Central Sulawesi


Nilam Sari
Brawijaya University Postgraduate Doctoral Program, Indonesia.
Nuhfil Hanani, Djoko Koestiono, A. Wahib Muhaimin
Lecturer at Postgraduate Program, Socio-Economic of Agriculture Departement University of Brawijaya, Malang, Indonesia.


This study aims to analyze the impact of a combination of government purchase price policies on the welfare of rice farmers during various simulation periods in Central Sulawesi. The data used in this research is the type of time series 1971-2018. Data analysis is proxied using an econometric model, which is built in the form of a system of simultaneous equations. The equation consists of 22 endogenous variables and 26 exogenous variableswith a lag of 14 variables. Furthermore, the model is estimated by the method2SLSand historical simulations for the period 1972-1980 (HDG), 1981-2001 (HDGB) and the period 2002-2018 (COGS).The results showed that the combination of government purchase price policies in all scenarios and simulation periods had a positive impact on changes in producer surplus. In the HDG period, the change in producer surplus was Rp 1.30-1.36 billion, in the HDGB period it was Rp.2.17-3.42 billion and in the HPP period it was Rp.3.76-17.56 billion. In addition, the combination of these policies actually harmed consumers, which was marked by the negative value of the consumer surplus, where the highest consumer losses were in the HPP period, namely Rp. 7.15-64.65 billion. Therefore, the instrument for combining the HPP policy with other production inputs is maintained to ensure a real increase in farmer welfare.