Food Prices Affect Poverty

Name: Food Prices Affect Poverty
Uploaded: 2018-07-17T06:00:06Z
Duration: 20 min 32 s
Description: The contribution of food commodities to the poverty line is growing. This could cause a slowdown in the race to eliminate poverty. The Central Statistics Agency’s data shows that food commodities contributed 73.31 percent to the poverty line in March 2017, which increased to 73.48 percent in March 2018.

The contribution of food commodities to the poverty line is growing. This could cause a slowdown in the race to eliminate poverty. The Central Statistics Agency’s data shows that food commodities contributed 73.31 percent to the poverty line in March 2017, which increased to 73.48 percent in March 2018.

· 5 minutes read

JAKARTA, KOMPAS — The contribution of food commodities to the poverty line is growing.This could cause a slowdown in the race to eliminate poverty. The Central Statistics Agency’s (BPS) data shows that food commodities contributed 73.31 percent to the poverty line in March 2017, which increased to 73.48 percent in March 2018.

The BPS records 25.95 million poor people in March 2018, or 9.82 percent of the population. In March 2017, there were 27.77 million poor people, or 10.64 percent of the population.

In the last year from March 2017-March 2018, the number of poor people in Indonesia decreased by 1.82 million.

From September 2017-March 2018, the BPS said that the decline in the number of poor people slowed because of a significant increase in the price of rice. In September 2017, there were 26.58 million poor people in the country, or 10.12 percent of the population.

BPS chairman Suhariyanto told a press conference on Monday (16/7/2018) in Jakarta that in the September 2017-March 2018 period, the rice price increased 8.57 percent. This caused the commodity-based poverty line to increase 3.63 percent from Rp 387,160 per capita per month in September 2017 to Rp 401,220 per capita per month in March 2018.

The average monthly per capita expenditure increased by a significant 3.06 percent for households in the lowest 40 percent.

"The poverty alleviation rate is not as fast as in March-September 2017. Therefore, the government really needs to maintain the stability of food prices if it wants to accelerate the poverty reduction rate," Suhariyanto said.

In March-September 2017, the number of poor people fell by 1.19 million. Meanwhile, in September 2017-March 2018, the number of poor people only fell by 633,200.

According to Suhariyanto, the decline in the number of poor people this year was helped by a number of factors, particularly social safety nets. The government\'s cash social assistance (bansos) increased 87.6 percent in the first quarter of 2018.

"The social assistance total was higher compared to the first quarter of 2017 which grew only 3.39 percent. Moreover, the rice program and non-cash food aid in the first quarter of 2018 were also distributed on schedule," he said.

Imbalance

According to BPS data, the inequality coefficient, or Gini ratio, fell 0.004 from March 2017 (0.393) to March 2018 (0.389).

The province with the highest inequality was Yogyakarta, with a Gini ratio of 0.441, while Bangka Belitung recorded the lowest Gini ratio of 0.281. A near-zero Gini ratio indicates low inequality.

Even though Indonesia’s Gini ratio fell significantly, the Gini ratio for villages increased. The Gini ratio in villages in March 2017 was 0.320, while it was 0.324 in March 2018.

This is in contrast to urban inequality, which declined. The Gini ratio in urban areas in March 2018 was 0.401, better than 0.407 in March 2017.

"Villagers, especially those with low incomes, need to receive government attention. A multi-sectorial policy is badly needed to increase the people\'s income and employment [rates]," said Suhariyanto.

The senior researcher at the Indonesian Institute of Sciences’ (LIPI) Center for Economic Research, Carunia Mulya Hamid Firdausy, said the decline in the number of poor people was not as good as expected. This was because the policy to provide employment, both in cities and villages, had not been fully realized.

This was also visible in the movement of the national economy, which remained slow so it was unable to absorb more labor or increase public incomes. The nation’s economic growth, which recently hovered around 5 percent, had not increased significantly.

"Another factor that also slows the decline in the poverty rate is the high increase in the prices of basic food [commodities]," said Carunia.

Regarding the increasing inequality in villages, Carunia said that labor-intensive programs, village funds and social assistance were still not enough to reduce the imbalance at the village level. The funds the people received by were either temporary or available only when the program was running. In reality, the villagers needed a sustained increase in their incomes. One of the solutions was to create employment in villages and increase farmers’ incomes.

"The high price of rice has been enjoyed by traders, collectors and farmers. Small farmers and agricultural laborers get little attention," said Carunia.

Focus

Finance Minister Sri Mulyani Indrawati said that the declining poverty rate in Indonesia was very encouraging. The decline indicated that the government\'s economic policies were correct.

Speaking on Monday in Jakarta at the 10th anniversary of PT Adaro Energy’s listing on the Indonesia Stock Exchange, Sri Mulyani said the government would spend around Rp 2.2 quadrillion this year on overcoming poverty, developing human resources and improving institutional management and governance. This was the government’s focus of to improve the the people\'s welfare.

"For the first time, our poverty rate is 9.82 percent. Before, in the era of Pak Harto (New Order) the figure was about 11 percent, then the poverty rate rose again after the [1997-98] crisis," said Sri Mulyani.

(HEN/TRA)

Editor:

gini ratio Poverty Food Prices ECONOMIC INDICATORS