CHAPTER 1

PRELIMINARY

1.1 Issue Background

Food is the most important human need, hence its fulfillment is everyone rights. This
statement specified by 2 (two) declaration namely Rome Declaration on World Food Summit and
the Millennium Declaration (MDGs) in 2000 which also targets the reduction in the number of
starvation by half by 2015.

Food consumption pattern in Indonesia is very dominated by rice, whereas excessive

dependence on a single type of commodity is vulnerable. In terms of consumption, resulting in a
narrowing of the spectrum of commodity options that should be used for food. From the
production side are also vulnerable because of: (i) the growth of rice production is largely
determined by the availability of irrigation water is sufficient, while irrigation water is getting
scarce, (ii) the rate of wetland conversion to non-rice is very difficult to control, and (iii) the
ability to perform wetland expansion (new construction) is very limited because of the cost of
investment is increasingly expensive, the budget is very limited, and the land which technically
feasible for a rice fields is decreasing.

Efforts to maintain the availability of rice in the country is embodied in one of the food
resilience program (revitalization of agriculture). Food resilience is the ability of a country to
ensure that all residents obtain food in sufficient quantity, decent quality and also halal, which is
based on the utilization and optimization based on the diversity of domestic resources.

Food diversification policy became one of the solutions to achieve food security and an
attempt to reduce rice consumption by way of diversification of staple foods. Diversification of
food by developing and introducing foodstuffs valuable alternative cheap rice and contains
nutrients that are not much different from the rice.

Diversification according to Government Regulation No. 68 of 2002 on Food resilience is

to increase the consumption of a variety of food with the principles of balanced nutrition. The
basic principle of diversification of food consumption is that none of the commodity or the type

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of food that meets overall nutritional elements needed by the body. However, with the role of
food as a functional food such as the fiber, antioxidants and so forth so that in choosing the type
of food is not only to consider the elements of nutrition such as the content of energy of proteins,
carbohydrates, fats, vitamins and minerals but also consider food with a role as a functional food.

Food diversification is not intended to replace the rice, but the change in consumption
patterns so that people will eat more types of food and better nutrition. By increasing the types of
food in the consumption patterns of rice consumption is expected to decline.

A very important factor in calculating food needs whether at district, provincial, and
national is consumption. It is necessary for the study of consumption per capita in household
producers and consumers. Information on the consumption of some types of food, can give an
idea of consumption patterns in the region.

The amount of rice consumption can indicate the success of food diversification program.
Consumption of maize and sweet cassava consumption as a food substitute will affect the
consumption of rice. The greater the consumption of maize and cassavaes, then the rice
consumption should decrease. The reduced consumption of rice may be an indication of the
success of diversification. In addition, rice consumption is also influenced by incomes. This is
related to the income elasticity. The greater the person's earned income, the consumption will be
even greater.

1.2 Formulation of the problem

Based on the background and the description above, the problems can be formulated in
this study are:

1. How does the development of the consumption of basic foods (rice, maize, cassava) in
Indonesia from the year 1981-2012?

2. How is the income elasticity of consumption elasticity of consumption of rice and maize and
cassava consumption as substitutes?

3. How does the income, consumption maize, and cassava consumption on rice consumption in
Indonesia?

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4. How about the successful of diversification in Indonesia ?

1.3 Research purposes

The aim of this study are :

1. Knowing the development of the consumption of staple foods (rice, maize, cassavaes) rice in
Indonesia from 1981 to 2012.

2. Knowing the magnitude of the income elasticity of consumption elasticity of consumption of

rice and maize and cassava consumption as substitutes.

3. Analyze the influence of income per capita, consumption maize, and cassava consumption to
consumption of rice in Indonesia.

4. Knowing how far the successful of diversification in Indonesia.

CHAPTER 2
3
 LITERATURE REVIEW

2.1. Food Security

Food is a basic need for humans to maintain viability. According Soekirman (2000), food
security is a complex phenomenon, covering many aspects and factors related to broad. Issues of
food security began in the 1970s along with the global food crisis. Soehardjo (1995) argues that
the concept of food security can be applied at various levels: global, national, up to the level of
the household or individual (Saliem, Handewi P. et al., 2004). It added that the food security
situation between levels can be mutually supportive. Meanwhile Hardinsyah et al. (1998) argues,
due to not every household or individual to have access to the food production process with
limited land ownership of agricultural land, to achieve household food security needs support
food availability at local and national level (Saliem, Handewi P. et al ., 2004).

Experts develop food security restrictions on food security to vary. However, the limits of
food security is generally accepted that the new agreed at the World Food Summit 1996, held in
Rome. Food security is defined as: "Unfulfilled condition nutritional needs of each individual in
the quantity and quality in order to be active and healthy life on an ongoing basis in accordance
local culture". In Indonesia, the notion of food security has been standardized in UU No. 18 of
2012. In Chapter I Article 1 mentioned food security is a "condition of food to the fullest up to
the individual countries, which reflected the availability of adequate food, both in quantity and
quality, safe , diverse, nutritious, equitable, and affordable and does not conflict with religion,
faith and culture, to be able to live healthy, active, and productive and sustainable.

2.2. The diversification of Food

Diversification of food according to UU No. 18/2012 on food is to increase the

availability and consumption of food is diverse, nutritionally balanced, and based on the
potential of local resources. Diversification includes the diversification of food production and
food consumption. In terms of food consumption, the program emphasizes on food consumption
varied and nutritionally balanced as well as optimizing the potential of the local food.

2.3. Consumption

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 Consumption is the number of items that are used directly by communities to meet their
needs. Keynes proposed that consumption is highly dependent on current income. Economists
therefore accepted that consumers understand that they face an intertemporal decision.
Consumers looked at the resources and needs of their future, which shows the consumption
function is more complex than that Keynes consumption function provide. Keynes proposed
form of the consumption function:

Consumption = f (income now)

While recent study states:

Consumption = for (current income, wealth, expected future revenues, interest rates)
In other words, current income is only one determinant of aggregate consumption (Mankiw,
2003).

Consumer preferences can be shown by the indifference curve, where the curve illustrates
the level of satisfaction of two of goods (services) are preferred by consumers. The higher the
indifference curve the higher the level of customer satisfaction. Convex shape of this curve to the
zero point indicates the satisfaction gained from consuming the goods first. Consumption goods
first preferred over the second level of consumption. This curve has the following characteristics:

1) Consumer tastes for certain goods considered to be consistent, as a result of this assumption is
the indifferen curve never overlap and intersect with one another.

2) Individuals or consumers prefer goods with higher numbers than smaller amounts, so the
result of this assumption is the indifference curve has a negative slope, which reflects the general
principle that individuals will sacrifice the goods to get the goods that have levels greater
satisfaction high.

2.4. Demand Theory

Sadono Sukirno (2008) defines that the law of demand essentially a hypothesis that the
lower the price of an item, the more demand for goods and vice versa.Demand curve can be
defined as the curve that describes the nature of the relationship between the price of a particular
item with that number requested the buyer.Demand law mainly looking nicely nature of the

5
relationship between the price of an item by the number that asked.Whereas in actual fact
because of the large demand is influenced also by other factors such as the price of other goods,
consumer incomes / community.

Q = f (Y,Pi,Pj,S,U)

Q = Number of commodities requested

Y = level of income

Pi = Price of commodity itself

Pj = price of commodity substitution / complement

S = Tastes

U = factor another factor

2.5. Elasticity

Bassically, elasticity is percentage change in one variable result-ing from 1-percent

increase in another.In general, quantity increases result in reduced quantity of goods demanded
and reverse the declining quantity resulted in an increased quantity of goods demanded. If the
comparison between the goods with other goods, it will be found that the intensity of the reaction
of buyers to quantity changes in the form of an increase or decrease in the amount requested
varies. By the change in the quantity of the same changes in the amount requested for the goods
can be more than for other goods.

If Q1 is the quantity demanded and Q2 is another quantity of another goods is requested,

then the elasticity of demand for the Quantity (EQ) is

Q 1/Q1 Q 2 Q1
Eq= =
Q 2/Q2 Q 1 Q2

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2.6. Cross elasticity

Cross-elasticity of quantity (cross-quantity elasticities of demand) is to measure the

response of the percentage change in the quantity demanded as the percentage change in the
quantity of other goods. Cross-quantity elasticity of demand calculation formula is as follows:

changethe quantity demanded of good X

Exy=
Changesthe quantity of goods Y

The value of elasticity will show a relationship between goods X to Y. goods nature of the
relationship between the objects that could be a relationship of mutual (complementer) or in the
form of goods replacing relationship (substitute) or no relationship at all.

2.7. Substitution goods

Substitution goods are goods which have benefits and usefulness are almost the same as
the primary, for example, maize is the substitution of rice. There were the usual substitutes and
there is also sometimes called substitution close. Close substitute goods are goods which
functions and uses the same, maybe just different brands, packaging and services, such as rice
with rice menthik 64. The more substitutions of an item, the more likely the consumer to move
from primary goods if there is an increase or decrease in price. Theoretically if the goods have
inclined elastic demand substitution. If the price of goods rose by 1 percent of the demand will
come down over 1 percent, and vice versa. (Sarnowo, 2013)

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 CHAPTER 3

RESULTS AND DISCUSSION

3.1 Rice consumption per capita in Indonesia

The increase in the consumption of the population in Indonesia to rice also followed by a
number of people is increasing every year. During the years 1981-2012, the average population
growth of 1.79 percent in Indonesia.

Rice consumption per capita Indonesia from 1981 to 2012 per year fluctuated with an
average of 148.25 kg / person / year. Highest rice consumption per capita per year occurred in
1999 in the amount of 168.28 kg / person / year. This is due to the availability of imported rice is
quite high in 1999.

3.2 Maize consumption per capita in Indonesia

Maize is a staple food that can replace the consumption of rice as a staple food source of
carbohydrate. The average maize consumption per capita of 36.29 kg per year and the average
growth in maize consumption per capita amounted to 5.80 percent. This amount is much
different from the average per capita rice consumption of 148.25 kg per year during 1981 to
2012. The average per capita consumption of rice around 4:09 fold compared to the average
consumption of maize. Maize consumption per capita from 1981 to 2012 fluctuated. One part

8
can be seen that maize consumption per capita in 2006 is decreased significantly by 19:16 kg in
one year or a decrease of 48.30 percent from the previous year. It is associated with a reduction
in maize production due to reduced maize harvest area of 3.6 million hectares in 2005 to 3:58
million hectares in 2006. Therefore, in 2007 the Ministry of Agriculture to take steps subsidizing
maize seed on the farmer groups. Picture of maize per capita consumption of Indonesian society
can be seen in Figure 3.4

3.4. Maize Consumption per Kapita

70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00

konsumsi jagung

3.3. Cassava consumption per capita in Indonesia

Cassava is a food that can be directly processed into finished or processed food in
advance in the form of semi-finished and used as a food ingredient later. Cassava has good
potential to be developed into a staple food source of carbohydrates instead of rice. Cassava
consumption per capita by the community Indonesia has fluctuated from 1981 to 2012. The
average per capita consumption of cassava for the study period of 64.96 kg per year, where the
average rate is higher than the maize which was only 36.29 kg per year. Average figures also
show that per capita consumption of cassava 2:41 fold higher than maize.

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3.4 Assumptions Test

3.4.1. Normality Test

Terms in the analysis of parametric data distribution should be normal. With the Shapiro-
Wilk test can be seen that the value of the significance of all the variables of more than 0.05, then
the regression model to meet the assumption of normality

3.4.2. Multicollinearity Test

Multicollinearity is a state in which between two or more independent variables in the

regression model occurred perfect linear relationship. To detect the presence or absence of
multicollinearity to see VIF. Based on the test results obtained by VIF value of less than 10, so it
can be concluded that in regression models multicollinearity problem does not occur.

3.4.3. Heteroskedasticity Test

Heteroskedasticity is a state where the inequality of the residual variance in the

regression model. To detect the presence or absence heteroskedasticity by looking at the pattern
of dots on scatter plot of the regression. From the results of scatterplots known that the dots
spread with no obvious pattern above and below the number 0 on the Y axis so the regression
model heteroskedasticity problem does not occur.

3.4.4. Autocorrelation Test

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 Autocorrelation is a state in which the correlation of the residuals for the observation of
one with the other observations arranged in time series. With the Durbin-Watson test obtained by
value d is 0.611. Of the Durbin-Watson table at 0.05, n = 32 and k = 3 obtained dL = 1.244 and
dU = 1,650. So it can be calculated the value of 4-dU = 2.350 and 4-dL = 2.756. D value is
between 4-dU dU and then there is no autocorrelation in the regression model.

3.5 Regression Model Equations

Based on testing by multiple regression with SPSS showed that consumption of maize,
cassava consumption, and per capita income have a significant effect on rice consumption. Thus
obtained regression equation as follows:

y = 133.893 + 0.57 x_1-0,148x_2 + 0,489x_3

Where

Y = consumption of rice

X1 = consumption of maize

X2 = consumption of cassavaes

X3 = GDP / capita

From the equation it can be said that if the consumption of maize increased by one unit of
the rice consumption will also increase to 0.57 provided that other variables are constant. If the
consumption of cassava increased by one unit, the consumption of rice will decrease by 0.148
provided that other variables are constant. And if income per capita rises one unit then the rice
consumption will rise another .489 provided that other variables are constant.

Judging from the R2 value which 51.2%, it can be said to be a variation of rice
consumption can be explained by the variable consumption of maize, cassava consumption and
income per capita amounted to 51.2%, while 48.8% described by other factors.

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3.7 Overview of per capita income in Indonesia Year 1981-2012

One of the factors that influence rice consumption per capita in Indonesia is the per capita
income of Indonesian people. Indonesia per capita income approximated by GDP per capita from
1981 to 2012. The per capita income Indonesia tends to increase every year. In 1997 during the
monetary crisis fell from 7,570,071 rupiah to 6,477,953 rupiah in 1998. The revenue picture rice
per capita per year in Indonesia can be seen from the following figure.

3.8 Elasticity analysis

Elasticity is the percentage change in one variable due to the 1% increase in other
variables (Robert S. Pindyick & Daniel R. Rubinfeld) .As we have seen that the demand for a
product depends not only on the price of the goods themselves but also on the revenue side and
the consumer also the price of goods lain.Begitu also offer a product not only depends on the
price of the goods themselves but also because of the variable variable factor affecting
production. Elasticity measures the sensitivity of one variable to another variable

TAHU KONSUMSI KONSUMSI PENDAPATAN PER

N JAGUNG UBI KAPITA

1982 -0.247 10.352 209.123

1983 0.133 -0.562 3.590
1984 -0.803 -0.150 -0.282

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1985 -0.211 11.259 17.814
1986 0.141 -0.381 1.260
1987 0.043 0.097 -0.258
1988 0.267 -1.859 1.962
1989 0.337 -1.987 -0.793
1990 0.655 -0.433 1.040
1991 0.197 -0.039 -0.115
1992 0.173 0.170 0.699
1993 -0.176 -0.989 0.588
1994 0.101 -0.157 0.254
1995 -6.776 0.875 0.410
1996 1.210 0.456 1.185
1997 -1.564 2.055 -1.675
1998 -0.009 0.019 0.008
1999 10.313 1.596 20.603
2000 -0.911 2.318 -2.823
2001 0.295 -3.868 -2.427
2002 -0.226 0.273 0.667
2003 0.137 0.076 0.445
2004 -1.800 -0.053 0.128
2005 0.886 -16.323 0.905
2006 -0.011 0.043 0.130
2007 0.052 -0.857 1.169
2008 0.310 0.729 1.081
2009 0.679 -14.892 1.963
2010 1.976 0.685 2.381
2011 0.187 0.306 0.323
2012 -0.030 0.033 0.029

The above table is a data elasticity of consumption of maize, ubi consumption and per
capita income on rice consumption period 1982-2012 which is the result data processing.Where
every increase of 1 ton of demand for maize consumption, the consumption of cassavaes, and the
per capita income will decrease / increase demand for consumption rice.

Based on the data processed to the data that we have attained so we can note that the
elasticity of consumption of maize against most major rice consumption occurred in 1999 in the
amount of 10.313, while the elasticity of the rice consumption to the lowest maize in 1998 is
0.009.Next to the elasticity of cassava consumption on rice consumption elasticity is the largest
value in 1985 amounted to 11.529 and the lowest was there in 1998 that only amounted

13
0.019.The next part is namely per capita income elasticity of the maize consumption in 1982
where elasticity is the largest value which is equal to 209.123 and the lowest in 1998. The
elasticity of less than one indicates that there inelasticity and vice versa.

CHAPTER 4

SUMMARY AND SUGGESTION

Based on the results and discussions of our paper,we can conclude these important summaries :

1. Rice consumption per capita Indonesia from 1981 to 2012 per year fluctuated with an
average of 148.25 kg / person / year. Highest rice consumption per capita per year
occurred in 1999 in the amount of 168.28 kg / person / year
2. The average of maize consumption per capita is 36.29 kg per year and the average of
growth in maize consumption per capita is about 5.80 percent. Maize consumption
per capita from 1981 to 2012 fluctuated

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3. Cassava consumption per capita in Indonesia fluctuated from 1981 to 2012. The
average of cassava consumption per capita in the period is 64.96 kg per year, where
the average rate is higher than the maize which was only 36.29 kg per year
4. Simultaneously, variable maize consumption per capita, cassava consumption per
capita and variables GDP per capita affect the rice consumption per capita, but if it is
tested partially, only variable maize consumption per capita which affect the
consumption of rice per capita, while the variable cassava consumption per capita and
GDP per capita is not significant.
5. The elasticity of consumption of maize against most major rice consumption occurred
in 1999 in the amount of 10.313, while the elasticity of the rice consumption to the
lowest maize in 1998 is 0.009.Next to the elasticity of cassava consumption on rice
consumption elasticity is the largest value in 1985 amounted to 11.529 and the lowest
was there in 1998 that only amounted 0.019.The last is namely per capita income
elasticity of the maize consumption in 1982 where elasticity is the largest value which
is equal to 209.123 and the lowest in 1998.
6. Generally, diversification In Indonesia have not been successful, because in the fact
the rice consumption is always more than the others staple food on diversification
target.

15
 LITERATURE REVIEW

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Drs. Hendry Sarnowo.2013.Pengantar Ilmu Ekonomi Makro Mikro.Jogjakarta.PT Buku Seru.

Rolinta Damanik.2015.Analisis Impor Beras 1971 2012.Jakarta.Sekolah Tinggi Ilmu Statistik

www.bps.go.ig

www.indexmundi.com

www.fao.org

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