Indonesian Journal of Agricultural Science Vol. 18 No. 2 December 2017: 77–86 DOI: http//dx.doi.org/10.21082/ijas.v.18.n2.2017.p.77–86 POLITICAL ECONOMIC ANALYSIS OF RICE SELF-SUFFICIENCY IN INDONESIA Analisis Ekonomi Politik Swasembada Beras di Indonesia Sri Nuryanti a* , Dedi Budiman Hakim b , Hermanto Siregar b and M. Husein Sawit a a Indonesian Center for Social Economics and Policy Studies Jalan Tentara Pelajar No. 3 Bogor 16124, West Java, Indonesia Phone: +62 251 8333964, 83338717, Fax: +62 251 8314496 b Faculty of Economics and Management, Bogor Agricultural University *Corresponding author: sri-nuryanti@litbang.pertanian.go.id Submitted 24 March 2017; Revised 17 April 2017; Accepted 15 November 2017 ABSTRACT Rice self-sufficiency is an important programme in Indonesia. The programme has four major targets, i.e. increasing production, stabilizing prices and reserve stocks, and minimizing import. For that purpose, the government gave a mandate to a parastatal, namely National Logistic Agency (Bulog) in implementing the rice policies. Some studies found that involvement of such a parastatal could lead to government failure in budget allocation. The study aimed to estimate social cost of rice self-sufficiency programme based on the implementation of rice instrument policies by Bulog. The study used the national annual data of 2002–2014 period. The method used was the political preference function model to estimate economic rent and dead-weight loss using rice price elasticity of demand and supply. The result showed that in terms of percentage of food security budget, the average of economic rent reached IDR 6.37 trillion per annum (18.54%), while the average of dead-weight loss amounted at IDR 0.90 trillion per annum (2.34%). It proved that rice self-sufficiency programme along with the involvement of Bulog was economically inefficient. The government should provide better agricultural infrastructure, review governmental procurement prices, and stop rice import policy to remedy market failure. [Keywords: budget, policy, rice, self-sufficiency] ABSTRAK Program swasembada beras merupakan program penting di Indonesia. Program tersebut mempunyai empat target utama, yaitu peningkatan produksi, stabilisasi harga dan cadangan beras pemerintah, serta penghentian impor. Guna mencapai tujuan tersebut, pemerintah memberi mandat kepada badan usaha milik negara, yaitu Bulog untuk melaksanakan kebijakan perberasan. Banyak kajian menemukan bahwa keterlibatan badan usaha semacam Bulog dapat memicu kegagalan pemerintah dalam mengalokasikan pendanaan. Pengkajian ini bertujuan untuk mengestimasi biaya sosial dari program swasembada beras berdasarkan pelaksanaan instrumen kebijakan beras oleh Bulog. Data yang digunakan merupakan data tahunan pada tingkat nasional periode 2002–2014. Pengkajian menggunakan model fungsi preferensi politik untuk mengestimasi rente ekonomi dan kesejahteraan sosial yang hilang dengan menggunakan nilai elastisitas harga dari permintaan dan penawaran beras. Hasil kajian menunjukkan bahwa rata-rata rente ekonomi yang timbul mencapai Rp6,37 triliun per tahun atau 18,54% dari dana ketahanan pangan, sedangkan kesejahteraan sosial yang hilang rata-rata Rp0,90 triliun per tahun atau 2,34% dari dana ketahanan pangan. Hal ini membuktikan bahwa program swasembada beras yang melibatkan Bulog dalam pelaksanaannya secara ekonomi tidak efisien. Pemerintah perlu menyediakan infrastruktur pertanian yang lebih baik, mengkaji ulang harga pembelian pemerintah, dan menghentikan impor beras guna meredam kegagalan pasar. [Kata kunci: beras, dana, kebijakan, swasembada] INTRODUCTION Rice self-sufficiency policy is an important part of agricultural development programme in Indonesia (Baharsjah et al. 2014). Therefore, the government implements policy instruments to achieve self- sufficiency targets, i.e. to increase the national production, to stabilize the domestic prices and reserve stocks, and to minimize the import. For that reasons, the government intervenes the domestic rice market by implementing rice policy instruments. In addition, the government involves a parastatal, namely National Logistic Agency or Bulog to execute the rice policy instruments along with the implementation of rice-self sufficiency programme. From the economic perspectives, self-sufficiency policy is inefficient (Barker and Hayami 1976), and being burden to the economy (Hutagaol 2017). The objective of such policy to increase rice production will imply on budget allocation. Therefore, some criticisms appeared assessing the programme. Involvement of Bulog in implementation of the rice policy instruments lead to the government failure, especially in budget allocation (Wambua et al. 2005; Zvavahera and Ndoda 2014) because operational activities of the parastatal is funded by the government (McCulloch and Timmer 2008). Hence, involvement of Bulog to accomplish the price stabilization and import policy received criticisms.