Improving the Efficacy of Climate Policy in the Indonesian Rice Sector: The Potential Use of Perceived-Impact Measures in Targeting Policy Beneficiaries

Abstract

Climate change (CC) increases the frequency of flood and drought and is a significant threat to smallholder rice farming in Indonesia. Adapting to these changes is crucial to minimize the damages to the Indonesian food system. Accordingly, the Indonesian government has formulated National Adaptation Plans (NAPs) to mitigate the effect of climate change on priority sectors, including rice farming. To this end, the Indonesian government included climate change adaptation into the National Development Plan (2019–2024). Selecting the appropriate beneficiaries of this program is crucial to improve the efficacy of Indonesian climate policy. In the case of rice farming, farmers with a high probability to adapt are the appropriate beneficiaries of this program. Thus, this chapter aimed to identify the characteristics of Indonesian smallholder rice farmers with a high probability to adapt to climate change. To this end, this chapter used the findings of the study on 87,330 rice farmers in Indonesia. Education, gender, land tenure security, presence of irrigation infrastructure, application of chemical fertilizer, cropping system, access to extension services, and participation in farmer group are significant determinants of adaptation practices. The finding suggests that prioritizing farmers based on these characteristics are crucial to improve the efficacy of climate policy.

Analysis of Farmers' Risk Preference Factors on the Determination of Rice Micro Insurance Premiums Using the Utility Theory

“…Many researchers have analyzed risk preference factors, including (Rokhani, et al, 2021) analyze the production risk preferences of lowland rice farmers using the Just and Pope Risk Functions.Besides that (Suryanto, et al, 2020;Anggraeni, et al, 2014), analyze rice farmers' risk preferences using the absolute risk aversion (AR) model, which is associated with the utility function.…”