Revisiting the impact of economic crisis on Indonesian agro-food production

Overview

This article discusses the impact of the ongoing global economic crisis on the Indonesian agro-food sector. It compares the current situation with the crisis of 1997–98 and examines whether the liberalisation of the Indonesian economy (and the agro-food sector specifically) in the post-1999 period has increased the exposure of Indonesian food producers and consumers to the volatility associated with global financial and commodity markets. During the 1997–98 crisis, the Indonesian state (with the support of the international development community) instituted structural reforms and increased stabilisation measures to mitigate the effects of the crisis. The author considers whether those measures are still in place to offset the shocks of the current crisis, and what effect they have had on Indonesian food producers and consumers. The question of consumer demand in a recessionary time has particular relevance for those Indonesian agro-food producers who diversified into high-value-added commodities (such as organics) in the past decade.