Agriculture in Crisis: People, Commodities and Natural by Francoise Gerard, Francois Ruf

By Francoise Gerard, Francois Ruf

Indonesia's financial and political main issue is tested right here relating to its impression on Indonesia's agricultural area. The twelve essays that include this quantity take a micro-economic strategy and research depends upon saw proof and first-hand info accumulated either prior to and after the country's hindrance. it is a full of life, good illustrated and instructive ebook.

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Extra info for Agriculture in Crisis: People, Commodities and Natural Resources in Indonesia, 1996-2000

Example text

In Chapter 8 more evidence will be provided to show that the crisis has equally affected the prices of inputs used by rubber growers. In addition, processing costs have increased in rupiah terms, due to higher nominal wages, higher costs of imported inputs and—an interesting corollary of the crisis—the scarcity of containers. 4 shows the impact of these price changes on domestic supplies, to the extent that this can be measured from the statistics currently available. The supply response is observable in the production figures for the second half of 1998.

The local prices used here are taken from the website of Indonesia’s Ministry of Agriculture. The figure shows that local prices did eventually reflect world market prices, but after some delay. Budiman (1998) reports similar but more consistent changes in prices. His findings are that local prices tripled over the period to September 1998. 3 Actual and theoretical local prices of natural rubber in Indonesia, 1998 price of rice! In Chapter 8 more evidence will be provided to show that the crisis has equally affected the prices of inputs used by rubber growers.

When, on 1 July 1997, Thailand announced its decision to stop supporting the baht, with the immediate result that it fell by 10% against the US dollar, it did not take more than a day for the international rubber market to react. On 2 July, the US dollar price fell by exactly the same amount. And when the Malaysian and Indonesian currencies followed the Thai devaluation some months later, US dollar prices were again adjusted downwards. The region’s currency devaluations thus had two unfortunate corollaries.

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