Long-term Impacts of Global Food Crisis on Production Decisions : Evidence from Farm Investments in Indonesia

Did the rise in food prices have a long-term impact on agricultural production? Using household-level panel data from seven provinces of Indonesia, this paper finds that the price shock created a forward-looking incentive to invest, which can dynamically enhance productivity in agriculture. It also...

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Bibliographische Detailangaben
Hauptverfasser:	Nose, Manabu, Yamauchi, Futoshi
Format:	Buch
Sprache:	eng
Schlagworte:	AGENCY COSTS AGRICULTURAL ACTIVITY AGRICULTURAL DEVELOPMENT AGRICULTURAL ECONOMICS AGRICULTURAL INPUTS AGRICULTURAL LAND AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTIVITY AGRICULTURAL PRODUCTS AGRICULTURAL SECTOR AGRICULTURAL TECHNOLOGIES AGRICULTURE ASSET HOLDINGS BEVERAGES BINDING CONSTRAINT CACAO CAPITAL INTENSITY CAPITAL INVESTMENT CAPITAL STOCK CASH FLOW CASSAVA CHANGES IN POVERTY CIVIL WAR COCOA COLLATERAL COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES CONNECTIVITY CONSUMER PRICE CONSUMER PRICE INDEX CREDIT CONSTRAINTS CROP PRODUCTION DEVELOPING COUNTRIES DEVELOPING COUNTRY DISPOSABLE INCOME DOMESTIC MARKET ECONOMIC SHOCKS EFFECT OF LIQUIDITY EGGS EXPENDITURE EXPENDITURES EXPOSURE EXPOSURES FACTORS OF PRODUCTION FARM EFFICIENCY FARM SIZE FARMER FARMERS FARMING ACTIVITIES FINANCIAL ASSETS FINANCIAL MARKETS FINANCIAL SUPPORT FLOUR FOOD COMMODITIES FOOD CONSUMPTION FOOD CROP FOOD EXPENDITURE FOOD EXPENDITURES FOOD POLICY FOOD POLICY RESEARCH FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FRUITS FUTURE PRICE FUTURE PRICES HOUSEHOLD HEAD HOUSEHOLD SIZE HOUSEHOLD WELFARE HUMAN CAPITAL INCOME INCOME GAINS INCOME INEQUALITY INCOME SHOCK INCOME SHOCKS INFRASTRUCTURE PROJECTS INSURANCE INTEREST RATE INTERNATIONAL COOPERATION INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INVESTMENT DECISION INVESTMENT DECISIONS IRRIGATION LAND ASSET LAND PRODUCTIVITY LAND SIZE LANDHOLDING SIZE LIQUID ASSETS LIQUIDITY LONG-TERM INVESTMENT LOW-INCOME COUNTRIES MAIZE MARKET INTEGRATION MARKET STRUCTURES MARKETING MEAT MILK NATURAL DISASTERS NUTRITION OUTPUT OUTPUTS PADDY POLITICAL ECONOMY POOR FARMERS POOR HOUSEHOLDS PORTFOLIOS POTATO PRICE CHANGE PRICE CHANGES PRICE EFFECT PRICE INCREASE PRICE INCREASES PRICE INFLATION PRICE LEVEL PRICE LEVELS PRICE UNCERTAINTY PRODUCER PRICES PUBLIC POLICY PURCHASING REGIONAL DISPERSION REGIONAL DUMMIES REGIONAL VARIATION REMOTE AREAS RISK PREMIUM RUBBER RURAL AREAS SAVINGS SCHOOLING SMALL FARMERS SUBSTITUTION SUBSTITUTION EFFECT TRANSACTION COSTS VEGETABLE CROPS VEGETABLES VILLAGE LEVEL VOLATILITIES VOLATILITY WHOLESALE PRICE
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Zusammenfassung:	Did the rise in food prices have a long-term impact on agricultural production? Using household-level panel data from seven provinces of Indonesia, this paper finds that the price shock created a forward-looking incentive to invest, which can dynamically enhance productivity in agriculture. It also finds that the impact of the price shock on investment behavior differs by initial wealth. In response to price increases, wealthy farmers invested more in productive assets, while poor farmers increased their financial savings as well as consumption. Price spikes relax liquidity constraints, which increases investments among the richer while do so savings and consumptions among the poor, possibly leading to diverging income inequality in the long run.