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Since re-achieving rice self-sufficiency in 1985, Indonesian agriculture has again been at a crossroads.1 During the twenty years of rapid economic growth, government policies affecting agricultural factor and product markets have been paramount in raising rice production to meet increasing domestic demand, while at the same time reducing Indonesia’s dependence on rice imports. But with per capita food supply now being sufficient, growth of domestic demand for the traditional staple foods will slow down and largely become a function of population growth, which is also decelerating. Moreover, with continued economic development, the agricultural sector will face falling demand elasticities of traditional staple crops and a shift in demand towards processed and luxury food products.
KeywordsLabour Productivity Agricultural Development Agricultural Policy Domestic Demand Green Revolution
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