Some studies report that climate change impacts are expected to significantly decrease Indonesia’s agricultural crop production by 2050, especially rice production. To improve agricultural productivity, the Indonesian government widely uses input subsidies that improve farmer access to seeds and fertilizer. However, the results of an EEPSEA study suggest that this may not be an effective solution. The study simulated the economy-wide impacts of climate-induced changes in agricultural production in the country. It analyzed the reduction in the output of various agricultural sub-sectors in two scenarios: with and without agricultural input subsidies. Results show that input subsidies exacerbate climate-induced impacts on the Indonesian economy.
Attaining Food Security in the Midst of a Changing Climate: Is Agricultural Subsidy Still Relevant?