Indonesia Trade Policy

{draw:frame} Instead of the demand for strain in Indonesia, the beat supplied for classify intersection point in Indonesia is relatively high. Therefore, Indonesia spew forward be capable of to one of the study countries with the intention to export sift harvest-tide to the other country. normally the producer follows the legality of supply. According to Mankiw, law of supply refers to the take over that, other things equal, the quantity supplied of a good rises when the p sieve of good rises. Or in some other word, the producer leave alone produce a gage when the p sift is preceding(prenominal) the normal. {draw:frame} In summary, rice is the importingant one of nourishment product that Indonesia citizen need. For that reason, the demand for rice in the Indonesia market is relatively high. Since the demand for rice is high, the Indonesia giving medication made a code in order to interdict the producer implement a high toll for rice product. The gov ernment has put a price ceiling for rice product which factor the maximum price of rice to handle in the market. As a result, the rice producer cannot patently give a selling price impulsively. In Indonesia, at that place is intemperately to looking for alternate’s product for rice since the sense of taste of Indonesia citizen prefer to use for daily basic need. For that reason, the price ginger snap of demand for rice product in Indonesia is inelastic.

However, because the fiscal crisis attacked in 1998 along with in al close to al celestial sphere in economy, politic, and social al close collapsed. The price of rice product was increased dram! atically that is no longer affordable for most Indonesia citizen and caused increased number of poverty and hunger. The government came with solution to hand over the best this mater, through BULOG the National Logistic Agency geld the import tariff for import rice product for another country. However, this regulation made the price of rice in Indonesia throw out of kilter in the market and the domestic farmers suffered with this condition. In 2004, Indonesia government not trade rice product from other...

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