The Effect of Agricultural Subsidies on Rice Productivity and Prices in Southeast Asia: A Panel Regression Study

Page Numbers: 292-309
Published: 2024-07-30
Digital Object Identifier: 10.58578/ijhess.v2i2.3507
Save this to:
Article Metrics:
Viewed : 79 times
Downloaded : 36 times
Article can trace at:

Author Fee:
Free Publication Fees for Foreign Researchers (0.00)
Connected Papers:
Connected Papers

Please do not hesitate to contact us if you would like to obtain more information about the submission process or if you have further questions.


  • Andi Sopian Universitas Hasanuddin Makassar, Indonesia
  • Retno Fitrianti Universitas Hasanuddin Makassar, Indonesia
  • Andryirawan Yakub Universitas Hasanuddin Makassar, Indonesia
  • A. Baso Aditya Sapanang Universitas Hasanuddin Makassar, Indonesia
  • A. Nur Fitrianti Universitas Hasanuddin Makassar, Indonesia
  • Hamka Hamka Universitas Hasanuddin Makassar, Indonesia

Abstract

Agricultural subsidies have become a common instrument used by countries in the Southeast Asian Region to support farmers, increase food production, and control prices. However, the effectiveness and long-term impact of these subsidies are still a hot debate in the economic literature. The purpose of this study is to analyze how agricultural subsidies affect rice productivity and rice prices in three Southeast Asian countries: Indonesia, Thailand, and Vietnam, during the period 2020-2023. The method used in this study is panel data analysis with a fixed effect to control the variation between countries that is not observed. Panel regression analysis was carried out to identify the relationship between agricultural subsidies and the two dependent variables. The F-test and Chi-square test are used to test for the existence of fixed effects, while the cross-section dependency test is used to check the residual correlation between countries. The results of this study show that the regression results of the panel show that agricultural subsidies have a significant negative impact on rice productivity (Y1), which may reflect inefficient resource allocation or the presence of market distortions that hinder productivity increase. In contrast, subsidies have a significant positive impact on rice prices (Y2), suggesting that subsidies can help maintain price stability and provide economic benefits for farmers. From the overall analysis, agricultural subsidies in Southeast Asia have a complex and diverse impact on rice productivity and prices. While subsidies help maintain price stability and support farmers' welfare, their impact on rice productivity still needs to be further eval_uated to ensure more efficient and sustainable allocations. Governments in the region need to continue to review and adjust their subsidy policies in order to strike a balance between supporting smallholders, increasing productivity, and maintaining rice price stability, while minimizing negative impacts on markets and the environment.

Keywords: Agricultural Subsidies; Rice Productivity; Rice Prices; Southeast Asia; Panel Regression
Share Article:

Citation Metrics:

Downloads

Download data is not yet available.
How to Cite
Sopian, A., Fitrianti, R., Yakub, A., Sapanang, A. B. A., Fitrianti, A. N., & Hamka, H. (2024). The Effect of Agricultural Subsidies on Rice Productivity and Prices in Southeast Asia: A Panel Regression Study. International Journal of Humanities, Education, and Social Sciences, 2(2), 292-309. https://doi.org/10.58578/ijhess.v2i2.3507

Creative Commons License
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

References

Anik, A. R., Rahman, S., & Sarker, J. R. (2017). Agricultural Productivity Growth and the Role of Capital in South Asia (1980-2013). Sustainability (Switzerland), 9(3), 1–24. https://doi.org/10.3390/su9030470
Barkah, T. T., Rusgianto, S., & Wardhana, A. K. (2022). Impact of Agricultural Land and the Output of Agricultural Products Moderated with Internet Users toward the Total export of Agricultural Product in Three Islamic South East Asian Countries. Media Agribisnis, 6(1), 11–22. https://doi.org/10.35326/agribisnis.v6i1.2261
Boon Teck, T., Pei Shan, F., Radin Firdaus, R. B., Mou Leong, T., & Mahinda Senevi, G. (2021). Impact of climate change on rice yield in malaysia: A panel data analysis. Agriculture (Switzerland), 11(6). https://doi.org/10.3390/agriculture11060569
Chhom, V., Tsusaka, T. W., Datta, A., & Ahmad, M. M. (2023). Factors influencing paddy producers’ profitability and sale to markets: evidence from Battambang Province, Cambodia. Cogent Food and Agriculture, 9(1). https://doi.org/10.1080/23311932.2023.2193311
Duasa, J., Fauziyyah, N. E., Adibah, N., & Radzman, M. (2023). Determinants of Food Production in Southeast Asia Region. Asian Journal of Research in Business and Management, 5(1), 11–22. https://doi.org/10.55057/ajrbm.2023.5.1.2
Fan, P., Mishra, A. K., Feng, S., & Su, M. (2023). The effect of agricultural subsidies on chemical fertilizer use: Evidence from a new policy in China. Journal of Environmental Management, 344(June 2022), 118423. https://doi.org/10.1016/j.jenvman.2023.118423
Guo, L., Li, H., Cao, X., Cao, A., & Huang, M. (2021). Effect of agricultural subsidies on the use of chemical fertilizer. Journal of Environmental Management, 299(May), 113621. https://doi.org/10.1016/j.jenvman.2021.113621
Laiprakobsup, T. (2019). The policy effect of government assistance on the rice production in Southeast Asia: Comparative case studies of Thailand, Vietnam, and the Philippines. Development Studies Research, 6(1), 1–12. https://doi.org/10.1080/21665095.2019.1568900
Lim, C. T. N. (2024). Empirical Analysis of Rice Prices, Production, and Consumption in the Philippines: Implications for Self-Sufficiency Policy. Review of Integrative Business and Economics Research, 13(2), 19–37.
Meng, M., Yu, L., & Yu, X. (2024). Machinery structure, machinery subsidies, and agricultural productivity: Evidence from China. Agricultural Economics (United Kingdom), 55(2), 223–246. https://doi.org/10.1111/agec.12820
Nugroho, A. D., Ma’ruf, M. I., Nasir, M. A., Fekete-Farkas, M., & Lakner, Z. (2024). Impact of global trade agreements on agricultural producer prices in Asian countries. Heliyon, 10(2), e24635. https://doi.org/10.1016/j.heliyon.2024.e24635
Promkhambut, A., Yokying, P., Woods, K., Fisher, M., Li Yong, M., Manorom, K., Baird, I. G., & Fox, J. (2023). Rethinking agrarian transition in Southeast Asia through rice farming in Thailand. World Development, 169, 106309. https://doi.org/10.1016/j.worlddev.2023.106309
Sugiono. (2012). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta CV.
Tanko, M., Iddrisu, A., & Alidu, A. (2016). Determinants of Rice Yield in Northern Region of Ghana, the Role of Policy. Asian Journal of Agricultural Extension, Economics & Sociology, 9(2), 1–11. https://doi.org/10.9734/ajaees/2016/22922
Thanh, P. T., & Duong, P. B. (2021). Economic impacts of hybrid rice varieties in vietnam: An instrumental analysis. Journal of Agricultural Science and Technology, 23(6), 1195–1211.
Tun, Y., & Kang, H.-J. (2015). An Analysis on the Factors Affecting Rice Production Efficiency in Myanmar. East Asian Economic Review, 19(2), 167–188. https://doi.org/10.11644/kiep.jeai.2015.19.2.295
Yohandoko, S., & Supriyanto, S. (2023). Panel Data Analysis on Rice (Paddy) Production in Indonesia 2018-2021. International Journal of Mathematics, Statistics, and Computing, 1(3), 44–53. https://doi.org/10.46336/ijmsc.v1i3.27
Yu, Y., Clark, J. S., Tian, Q., & Yan, F. (2022). Rice yield response to climate and price policy in high-latitude regions of China. Food Security, 14(5), 1143–1157. https://doi.org/10.1007/s12571-021-01253-w