SUPPLY RESPONSE OF THE SOYBEAN IN INDONESIA

Abstract

Soybean is one of the high-value food commodities. Domestic soybean production has been unable to meet the needs of the community so that the import options to meet the needs. Increased demand is growing bigger every year, causing dependence on imported soybean. This study aimed to assess factors that influence the supply of soybeans during 1993-2015 in Indonesia. A hypothesis test is done with a partial adjustment model and the Durbin-Watson statistic is used to test for the problem of autocorrelation in the data. The results showed that the rate of land growth and soybean production decreased on average per year by 2.81 and 1.6 percent, respectively, while productivity grew by 1.4 percent. The short-term and long-term supply elasticity was influenced by the area of soybean harvest, the area of corn harvest, the productivity and the price of local soybeans, while the price of imported soybean did not show any significant effect. The coefficient of production adjustment suggests the study suggests to considering this elasticity for agricultural planning and policy assessment.