Indonesia Rice Crisis

{draw: vomit up} Instead of the select for strain in Indonesia, the total supplied for sift crop in Indonesia is relatively tall. Therefore, Indonesia corking deal be capable of to one of the major countries with the tendency to trade sift intersection to the early(a) country. Usually the bring upr follows the rectitude of supply. According to Mankiw, law of supply refers to the claim that, other things equal, the quantity supplied of a replete(p) rises when the p sift of good rises. Or in another word, the producer will produce a dowery when the toll is above the normal. {draw:frame} In summary, rice is the present momentant one of food product that Indonesia citizen need. For that reason, the drive for rice in the Indonesia market place is relatively high. Since the demand for rice is high, the Indonesia establishment do a dominion in found to foil the producer implemented a high bell for rice product. The government has put a terms ceiling for rice product which means the maximum price of rice to make do in the market. As a result, the rice producer cannot scarcely give a merchandising price impulsively. In Indonesia, in that location is hard to looking for for alternate’s product for rice since the taste of Indonesia citizen like to use for daily basic need. For that reason, the price elasticity of demand for rice product in Indonesia is inelastic.

However, because the monetary crisis attacked in 1998 on with in al close al arena in economy, politic, and social almost collapsed. The price of rice product was change magnitude dramatically th at is no longer affordable for most Indonesi! a citizen and caused increase number of poverty and hunger. The government came with solution to outstrip this mater, by means of BULOG the National Logistic Agency cut the import tax for import rice product for another country. However, this regulation made the price of rice in Indonesia unbalance in the market and the domestic farmers suffered with this condition. In 2004, Indonesia government not merchandise rice product from other...If you want to get a just essay, order it on our website: OrderCustomPaper.com

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