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The Impact of Economic Policies on Cocoa Export and Production in South Sulawesi, Indonesia
Thesis Abstract:
Indonesia is the third largest producer of cocoa in the world, with South Sulawesi Province as main contributor. However, there are several economic policies affecting cocoa export and production. Hence, this research was conducted. The estimation of the model used time series data 1983-2002 by two-stage least squares (2SLS) method. Among the key findings of the research were: (1) harvested area of cocoa was higher after the implementation of GRATEKS policy; (2) production technology was a significant factor for increasing cocoa productivity; (3) South Sulawesi’s cocoa export supply was changed by Indonesian price export, growth rate of production, exchange rate, and time trend; (4) export tax policy implementation impacted the decrease of the cocoa export and price; and (5) increase in the world cocoa price caused Indonesian export price to soar.
Manure subsidy policy for farmers is helpful to increase cocoa production, export, and price in South Sulawesi. To prevent the “adding-up problem,” devaluation policy is offered as the second policy alternative, with the main reason that this policy will lead to increase in South Sulawesi production, export, and price.