Food consumption, food cash dependency, and food policy in Indonesia

The general purpose of this study was to examine the differences between rural and urban consumers in how they acquire their food. In particular, to determine what proportion of the food consumed by rural and urban households was purchased with cash in the market place. The quantity of food purchased was modeled as a function of household income, household size, prices and cash dependency (food purchased divided by total food consumed).;The data used in this study are from the 1993 Survei Sosial Ekonomi Nasional (SUSENAS) in East Java, conducted by the Biro Pusat Statistik - BPS (Central Bureau of Statistics), Indonesia. The results indicate that cash dependency for all food categories examined was significantly related to the quantities purchased of all food types. Significant differences in cash dependency were also found between rural and urban consumers, with rural consumers having lower food cash dependency ratios than urban consumers.;Perhaps the most surprising discovery was that the vast majority of rural consumers were also very dependent on cash for acquiring food. Most agricultural economists concerned with less developed countries have long assumed that rural households produced most of the food they consumed. This study found that among the 1183 rural households surveyed in Eastern Java, the lowest average percentage purchased of the fourteen categories of food were 70%, 72%, and 76% for fats and oils, vegetables and fruits, respectively. Eighty-eight percent of cereals were purchased and for the remaining ten categories 90 to 100 percent of the foods were purchased in the market. The assumption that people in rural areas in Indonesia produce and consume their own foods may no longer hold. The data from the survey shows that fewer and fewer subsistence farms exist in this area (East Java). The rice price policy which was in existence at the time of the survey may explain the very high proportion of cereals which were purchased. However, further study is needed to determine whether such high proportions of food are purchased by rural households in other parts of Indonesia and in other less developed countries. (Abstract shortened by UMI.).