Risks and spatial connectivity evidence from food price crisis in rural Indonesia |
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Authors: | Futoshi Yamauchi Reno Dewina |
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Affiliation: | 1. International Food Policy Research Institute, 2033 K Street, NW, Washington, DC, United States;2. The World Bank, 1818 H Street, NW, Washington, DC, United States |
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Abstract: | This paper examines the impact of the agricultural commodity price surge globally experienced in 2007/2008 and thereafter on income growth of agricultural producers and non-producers using recent panel data from Indonesia. First, during this period, producers experienced significantly higher earnings and total income growth than non-producers (narrowing their income gap). Second, the negative effect on non-producers’ real incomes was smaller in spatially well-connected areas, where, to mitigate the impact, private transfers (such as remittances) as well as employment incomes increased among non-producers. In contrast, government programs did not effectively cushion the income shock. Therefore, informal insurance was more effective than formal government-funded social protection programs to mitigate the crisis shock. |
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Keywords: | Food price crisis Spatial connectivity Private transfers Indonesia |
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