Analysis of Government Rice Absorption in Indonesia

Abstract

This study analyzes the government's absorption of rice in Indonesia. The government's rice absorption has decreased in the last three years (2018-2020). The decrease in absorption is in line with the decline in farmer production and the difference between the government's purchase price of rice and the market price. The purpose of this study was to test and analyze the difference between government rice prices and market prices (PBR) and the amount of rice production circulating in the community (JPB) on the government's rice absorption capacity (DBP) in 34 Indonesian Provinces for the 2011-2020 period. Regression results with the Panel Model show that (PBR) and (JPB) have a significant positive effect on (DBP). Government policies and roles are urgently needed, especially in setting purchase prices for government rice and sustainably increasing the amount of production by facilitating agricultural facilities and infrastructure so that they can affect the government's rice absorption capacity in Indonesia.