Productivity and Welfare of Rice Farmers in Indonesia: A Policy Reorientation toward Innovation and Total Factor Productivity

Abstract

This article examines the persistent stagnation of rice productivity and the limited welfare gains experienced by rice farmers in Indonesia despite decades of price-based policy interventions. Drawing on policy analysis, secondary data, and previous research on national rice policy, the study argues that price support mechanisms have been insufficient to address structural constraints such as small farm sizes, regional productivity disparities, and weak innovation diffusion. The analysis highlights dysfunctions within Indonesia’s agricultural innovation system that impede the translation of research outputs into on-farm productivity gains. The paper proposes a reorientation of rice policy from price support toward productivity-led growth through strengthened research, extension, and institutional coordination. This policy shift is framed in alignment with Indonesia’s National Medium-Term Development Plan (RPJMN), emphasizing the strategic role of the National Research and Innovation Agency (BRIN) in enabling an integrated and innovation-driven food security strategy. The findings contribute to the food policy literature by demonstrating that sustainable improvements in farmer welfare and food security are more likely to emerge from innovation-centered policies than from administratively maintained price regimes.