Policy urgency and development of the highest retail price (HRP) of subsidised fertilizer

¹ Doctoral Program of Development Studies, Graduate School, Hasanuddin University, Makassar, Indonesia
² Professor of Hasanuddin University, Makassar, Indonesia
³ Doctor of Hasanuddin University, Makassar, Indonesia
⁴ Reserchers of Indonesian Center for Agricultural Socio-Economic and Policy Studies Reserchers of Indonesian Center for Agricultural Socio-Economic and Policy Studies, Indonesia

^* Corresponding author: hasimkementan@gmail.com

Abstract

Fertilizer price subsidies aim to increase the purchasing power of poor farmers in order to increase their productivity and farm income. This study aims to analyze the urgency of the fertilizer subsidy policy, and the development of the subsidized fertilizer HET ratio and the price of grain at the farmer level. The study was conducted in West Java Province, 2020. The data used include primary data and secondary data. Data analysis was carried out quantitatively and descriptively qualitatively. The results showed that the fertilizer subsidy policy was given to farmers who farmed a maximum of 2 hectares per season. In Indonesia, the total number of households using land with a scale of < 2 ha reaches 89%, which are small farmers and require input subsidies. Furthermore, the ratio of output prices to urea fertilizer (2012-2021) tends to increase by 0.97%/year. This shows that the development of subsidized fertilizer prices is relatively small compared to the development of government purchasing prices for paddy. Therefore, in order to improve the efficiency of fertilizer use and maintain the volume of subsidized fertilizer in the midst of a limited fertilizer subsidy budget, efforts must be made to be more targeted and efficient.