Impact of Wetland Conversion in Java and Outside Java on National Food Availability and Accessibility

Abstract

To ensure sustainable food availability and accessibility in Indonesia, it is needed the policy that could reduce the persistent wetland conversion in Java that tends to incerase, since Java has been contribution of 60 percent of national rice. This study disaggregated into Jawa and outside Java. The purposes of this study are at: (1) analyzing the factors affecting wetland conversion in Java and outside Java, (2) analyzing the impacts of wetland conversion in Java and outside Java on national food availability and accessibility, (3) analyzing the impact of economic policies implementation in agricultural sector on national food availability and accessibility, as well as on changing of welfare indicators. The model specification was done that included dynamic simultaneous equations which consisted of 19 behavioral equations and 22 identities, model identification performed by using the order condition criteria, while model estimation conducted by employing 2-SLS method. The results of study indicated that wetland conversion has had been compensated by import. Therefore, decreased food availability and accessibility per capita were under-estimated. Price policy became ineffective if at the same time the government also ran import rice policy. The mix policies implementation through instruments: increased the real price of unhusked rice of by 15 percent, decreased the real price of Urea fertilizer of by 10 percent and decreased import quotas of by 37.5 percent were considered as the best policy when wetland conversion increased by 1 percent. This mix policy has positive impact both on producers (farmers) and government; except for consumer. Development of economic region that still focused in Java should be directed to the outside Java in order to reduce the persistent wetland conversion by implementing locally specific policies.