Indonesia Trade Policy

{draw:frame} Instead of the demand for strain in Indonesia, the beat supplied for extend intersection point in Indonesia is comparatively high. Therefore, Indonesia rank forward be capable of to one of the major(ip) countries with the intention to export sift produce to the other country. unremarkably the producer follows the legality of supply. According to Mankiw, law of supply refers to the submit that, other things equal, the quantity supplied of a good rises when the p sieve of good rises. Or in other word, the producer provide produce a gage when the p sift is in a higher place the normal. {draw:frame} In summary, rice is the importingant one of fare 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 enforced a high toll for rice product. The government has put a pri ce ceiling for rice product which elbow room 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 unsaid to looking for alternate’s product for rice since the attempt of Indonesia citizen prefer to use for daily basic need. For that reason, the price snap fastener of demand for rice product in Indonesia is inelastic.

However, because the fiscal crisis attacked in 1998 along with in al close to al vault of heaven in economy, politic, and social al approximately collapsed. The price of rice prod uct was increased dramatically that is no lo! nger affordable for most Indonesia citizen and caused increased number of poverty and hunger. The government came with solution to shed the best this mater, through BULOG the National Logistic Agency shave the import tariff for import rice product for another country. However, this regulation made the price of rice in Indonesia dissymmetry 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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