Indonesia, an agrarian nation known for its vast agricultural lands, is currently grappling with an ironic issue—soaring rice prices. The World Bank recently revealed that the rice price in Indonesia is notably higher than in other Southeast Asian countries, raising concerns over the affordability of one of the nation’s staple foods.
Carolyn Turk, the World Bank’s Country Director for Indonesia and Timor-Leste, made a striking statement during the 2024 Indonesia International Rice Conference (IIRC) held in Bali on Thursday, September 19, 2024. She highlighted that Indonesian consumers are paying up to 20% more for rice compared to their ASEAN neighbors.
“We estimate that Indonesian consumers are paying up to 20% more for their food,” Carolyn explained. This price discrepancy, she noted, stems from several factors, including restrictive import policies and the government’s decision to raise rice prices, which in turn has weakened the country’s agricultural competitiveness.
The impact of these policies is clear, international retail rice price in Indonesia consistently rank higher than those of other major ASEAN countries. But this price hike doesn’t just affect consumers; it also highlights a deeper issue—many of the country’s small-scale farmers continue to struggle financially despite the rising cost of their produce.
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Data from the Central Statistics Agency (BPS) paints a stark picture. Carolyn reported that small farmers in Indonesia are only earning around $341 per year, which equates to approximately Rp5.18 million, based on an exchange rate of Rp15,216 per US dollar. On a daily basis, their average income is a mere $1 or around Rp15,216 as of September 19, 2024.
“The income for rice farmers is much lower than that of those working in plantations or horticulture,” Carolyn emphasized. This disparity has become a growing concern, as the rising cost of rice does not translate into better livelihoods for those producing it.
The data highlights a troubling paradox: while Indonesian consumers pay premium prices for rice, many of the country’s rice farmers remain impoverished. These challenges underline the need for policy reforms that not only protect consumers but also support the agricultural workforce that sustains the nation’s food supply.
