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Long-term Impacts of Global Food Crisis on Production Decisions: Evidence from Farm Investments in Indonesia
This paper estimates farmers’ investment response to food price spikes using household panel data collected before and after the 2007/08 food price crisis in Indonesia. We found that an increase in farmers’ terms-of-trade allowed relatively large crop-producing farmers to increase their investments at both extensive and intensive margins. Food price spikes had a significant income effect among farmers whose production surplus is large for market sales. During the food price crisis, large farmers particularly increased machine investments, which saved some labour inputs, pointing to the importance of complementarities between land and machine investments.
The Role of Markets, Technology, and Policy in Generating Palm-Oil Demand in Indonesia
Indonesia produces more palm oil and consumes more palm oil per capita than any country in the world. This article examines the processes through which Indonesia has promoted palm-oil consumption and some of the consequences of that promotion. Partial equilibrium modelling shows that Indonesia's remarkable increase in palm-oil consumption since 1985 is not largely attributable to population and income growth. Instead, much of this consumption growth has resulted from substitution away from coconut oil, facilitated by government policies on technology, pricing, distribution, and trade. The switch from coconut oil to palm oil in Indonesia was associated with increased land conversions to agriculture and diminished smallholder competitiveness. Despite lower rates of cooking-oil substitution in the future, simulations suggest that Indonesia's total palm-oil consumption in 2035 will be at least double that of 2010.
Managing Rural Landscapes in the Context of a Changing Climate
Global competition for natural resources is intense and the supply of those resources is increasingly more constrained by climate variability and change. Governments and international development agencies have the dual responsibility to meet the socioeconomic needs of the poorest and most vulnerable people while preserving and enhancing their natural capital. These responsibilities often are at odds with each other and different stakeholder groups have prioritized one over the other. This paper suggests that the landscape approach provides a solution for stakeholders to achieve climate change mitigation, adaptation, and poverty reduction goals, though not without some trade-offs.