Food Crop Farmers' Welfare Declined in October 2024

The welfare of Indonesian food crop farmers has declined over the past year. This is reflected in the weakening farmer exchange rate (NTP).

According to a report by the Central Statistics Agency (BPS), in October 2024 the food crop NTP stood at 110.86, down 0.46% month-on-month (mom), and 3.22% lower year-on-year (yoy), indicating a shrinking surplus.

NTP is one indicator used to measure farmers' welfare. This indicator is based on the comparison between the price of products produced/sold by farmers and the price of products they need for production/business and household consumption.

An NTP score above 100 reflects a surplus for farmers, where the selling price of their products is greater than their production and consumption expenses. An NTP of 100 means farmers are breaking even, and an NTP below 100 reflects a deficit.

The decline in the food crop NTP over the past year coincides with the weakening price of harvested dry paddy (GKP) at the farmer level, which fell 6.26% (yoy) to Rp6,422/kilogram in October 2024.

Similarly, the price of milled dry paddy (GKG) fell 7.97% (yoy) to Rp7,089/kilogram.

Compared to the initial NTP calculation, assuming an NTP score of 100 in 2018, the welfare of national food crop farmers increased by less than 11% in the six years to October 2024.

This means that the average annual increase in the food crop NTP was less than 2%.