Farmer Welfare in Seven Provinces Declined in August 2021

Every September 24th is commemorated as National Farmers Day. Sadly, as a country with a large agricultural workforce, not all farmers in Indonesia enjoy a good standard of living.

Based on data from the Central Bureau of Statistics (BPS), the welfare of Indonesian farmers in several regions has actually declined. The Farmer Exchange Rate (NTP) in 7 provinces was below 100 in August 2021. This indicates that the welfare of farmers in these 7 provinces is lower than the initial base position of the NTP index calculation in 2018, which was 100 (2018=100), and also below the national NTP of 104.68.

NTP > 100 indicates that farmers experience a surplus because farmer income increases and is greater than expenditure from the beginning of the index calculation period. Then, NTP = 100 indicates that the farmer's business is breaking even because the income received by the farmer is equal to the costs paid by the farmer. Meanwhile, an NTP < 100 indicates that farmers experience a deficit because the income received by farmers is lower than the costs paid by the farmers.

Of the 7 provinces with low NTP, 3 are in Java, 2 in Sulawesi, 1 in Nusa Tenggara, and 1 in Bali. The other 27 provinces have a higher NTP.

Bali's NTP was recorded as the lowest in August 2021, at only 92.88. This means that the welfare of farmers on the "Island of Gods" is the lowest compared to farmers in the other 33 provinces. The next lowest NTP was East Nusa Tenggara, at only 95.05, West Java at 96.46, Yogyakarta Special Region at 96.63, then Banten at 96.65, South Sulawesi at 98.19, and Southeast Sulawesi at 99.87.

The welfare of farmers in these 7 provinces has decreased compared to the initial period of the index, namely at the beginning of 2018 as the start of the NTP index calculation. The price index received (it) by farmers tends to be lower than the price index that must be paid (ib) by farmers throughout January 2018 – August 2021.

This condition indicates that the level of exchange capacity for goods (products) produced by farmers in rural areas tends to be lower than the goods/services needed for agricultural production processes and for household consumption.