Study Finds Domestic Rice Production Remains the Strongest Driver in Reducing Indonesia’s Rice Imports

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FORMOSA NEWS - Surabaya - Indonesia ranks among the world’s largest rice producers, yet the country continues to rely on imports to maintain food supplies and stabilize domestic prices. A new study by Ahwan Nur Agustin and Lucky Rachmawati from Universitas Negeri Surabaya (UNESA), published in the Formosa Journal of Multidisciplinary Research (FJMR) in 2026, provides fresh evidence on the economic forces shaping Indonesia’s rice import decisions. Analyzing more than three decades of national data, the researchers found that domestic rice production consistently reduces import dependence, while international rice prices and the rupiah exchange rate continue to influence import volumes. These findings offer timely insights for strengthening Indonesia’s food security strategy.

Rice remains the staple food for most Indonesians, making its availability a matter of national importance. Rising population growth, climate-related production disruptions, and fluctuations in global commodity markets have increased pressure on policymakers to balance domestic production with imports. The sharp increase in rice imports during 2023–2024, following production declines linked to the El Niño phenomenon, has renewed public debate over Indonesia’s long-term food security and self-sufficiency goals.

According to the study, Indonesia consumed approximately 36.6 million metric tons of rice during the 2024–2025 period, making it the world's fourth-largest rice consumer. Average annual rice consumption reached 92.1 kilograms per capita, while imports surged dramatically from less than 500,000 tons during 2020–2022 to 3.06 million tons in 2023 and 4.51 million tons in 2024. The researchers argue that these trends demonstrate how domestic production alone has not consistently met national demand.

Examining Three Decades of Rice Import Trends

The research evaluated Indonesia’s rice import patterns from 1993 to 2025 using secondary data obtained from official institutions, including Statistics Indonesia (BPS), the Ministry of Trade of the Republic of Indonesia, and the Food and Agriculture Organization (FAO). Rather than focusing on a single economic factor, the study examined the combined influence of four variables:

• Domestic rice prices
• International rice prices
• National rice production
• The rupiah exchange rate against the US dollar

To distinguish between immediate and long-term effects, the researchers employed an Autoregressive Distributed Lag (ARDL) analytical model, allowing them to compare short-term economic responses with long-run structural trends.

Key Findings

The study reports several important findings that help explain Indonesia’s continuing dependence on imported rice.

Domestic rice production significantly reduces imports.

Higher national rice production consistently lowered import volumes in both the short and long term. Although the long-term effect was moderate, it remained statistically significant, confirming that stronger domestic production is the most reliable way to reduce reliance on foreign rice supplies.

International rice prices increase long-term import volumes.

Contrary to conventional expectations, higher global rice prices were associated with higher rice imports in the long run. The authors explain that rice demand in Indonesia is highly inelastic because rice is an essential staple food. Even when international prices rise, imports continue because maintaining national food availability takes priority over minimizing import costs.

Domestic rice prices matter only in the short term.

The analysis found no statistically significant long-term relationship between local rice prices and import volumes. However, short-term increases in domestic prices encouraged additional imports, reflecting the government's efforts to stabilize supplies and prevent excessive price increases for consumers.

The rupiah exchange rate has mixed effects.

In the long run, changes in the rupiah exchange rate were positively associated with rice imports. In contrast, short-term depreciation of the rupiah tended to reduce imports because imported rice became more expensive. According to the researchers, these differing effects reflect the interaction between exchange rates, domestic production, and food security policies rather than simple market mechanisms.

Why the Findings Matter

The study suggests that Indonesia’s rice import decisions are driven by strategic national priorities rather than by price signals alone. Government interventions, food reserve policies, and concerns over food security often outweigh conventional market responses when determining import volumes.

For policymakers, the findings reinforce the importance of investing in agricultural productivity to reduce long-term dependence on imported rice. Increasing domestic harvests would strengthen food security while reducing exposure to international market volatility and exchange rate fluctuations.

The research also recommends developing more responsive stock management systems, improving coordination among government agencies, and using data-driven early warning systems to anticipate production shortages before import decisions become necessary. Farmers and agricultural businesses could benefit from adopting modern farming technologies, strengthening farmer organizations, and improving access to real-time market and weather information to increase productivity and resilience.

Academic Perspective

Ahwan Nur Agustin and Lucky Rachmawati of Universitas Negeri Surabaya conclude that Indonesia’s rice imports are shaped more by strategic and structural considerations than by market price mechanisms alone. Their analysis indicates that strengthening domestic agricultural production remains the most sustainable pathway for reducing long-term import dependence while supporting national food security.

Author Profiles

Ahwan Nur Agustin is a researcher from Universitas Negeri Surabaya (UNESA) whose work focuses on economics, international trade, agricultural policy, and food security.

Lucky Rachmawati is an academic and researcher at Universitas Negeri Surabaya (UNESA) specializing in economics, international trade, development economics, and public policy.

Source

Article Title: Analysis of Factors Affecting the Volume of Rice Imports in Indonesia

Authors: Ahwan Nur Agustin & Lucky Rachmawati

Journal: Formosa Journal of Multidisciplinary Research (FJMR), Volume 5, Issue 7 (2026)

DOI: https://doi.org/10.55927/fjmr.v5i7.103