The Effectiveness and Efficiency of Government Interventions in Rice Production: (The Case of Inputs Subsidy)

The aim of this paper is to examine the effectiveness and efficiency of inputs subsidy in rice production in order to achieve food self sufficiency and food security since the major constrain of farmer is capital limitation to buy seed and fertilizers. Inputs subsidy will increase the demand of those particular goods and by increasing the demand will also increase the output of rice production. For that purpose, this paper uses secondary data with descriptive analysis and regression analysis in order to examine the effectiveness and the efficiency of inputs subsidy. The result reveals that inputs subsidy effectively increase rice production in Indonesia up to the minimum threshold for food self sufficiency. Meanwhile in term of efficiency, inputs subsidy is less efficient for national budget since the gain from the subsidy is less than the subsidy that is given by the government.