Consumer or Farmer First? Anomaly and Inconsistency in Indonesia Agriculture Policy

In this last 2 years agriculture international price is skyrocketing, for example Thailand rice price hit a new record of 1000$ per tonne. Very high rice price means more profit to Thailand farmer, but it means a great disaster for food importer countries such as West Africa. If we read newspaper, skyrocketing agriculture price create political turmoil in poor countries. The politician and government reacted by try to bring down the food price using food subsidize mechanism.

Lets ignore this world food crisis problem for a while. I will give a short review over Indonesia agriculture condition.
Nearly 44% of Indonesia workforce work in agriculture sector, but the problem is the agriculture sector share is only 14% of Indonesia GDP, or simply high inequality in the agriculture sector. Remember! Agriculture is the main economic activity in rural area.
Then what is the impact of higher global food price? Higher food price means more income and more incentive to farmers to increase their production capacity. But its bad for the macro-economy especially inflation. Higher food price means higher inflation, and higher inflation hurt the poor by deteriorating their purchasing power. The problem is nearly 50% of Indonesia people life with 2$ a day, and also nearly 60% of the poor, around 23 million of 37 million, live in rural area.

The condition above create an anomaly in policy making. In one side the government must keep inflation and food price low enough so its does not hurt the poor. But on the other side the government must maintain a reasonable high price to give incentive to farmers to increase their production and increase rural welfare.
Is there any policy to achieve both objective above? Yes! Give high subsidy to the farmers like the Developed Countries do. But the problem is our government does not have the money to do it. Then they turn their head to the consumer, Cheap Food Politic.

The principle of Cheap Food Politic is as long as the food price cheap, the majority (poor) will keep silent. This policy is simply urban bias. Cheap food price is good for poor urban (the 40%), which main source of income is service and manufacturing sector. But bad for poor rural (the 60%), which main source of income is agriculture sector. Lower food price mean lower income and also lower welfare for rural area. The government sacrifice the rural for the sake of the urban. Why? Because poor urban is more attractive politically than poor rural.

An anomaly and inconsistent policy right? Are there any solution? Yes! But its required an academic research with a lot of reference that is out of the scope of this essay.
Now I'm trying to write one and also my classmates.
Just wish us good luck.