MAIZE SUPPLY RESPONSE IN INDONESIA

Demand for maize in Indonesia keeps growing due to low maize production, while consumption keep increasing (excess demand). The situation creates scarcity in maize and leads to the commodity's high price. This study aims to analyze the supply response of maize farmers on the changes of input and output prices. This study also examines the supply response of maize farmers in Indonesia by using Error Correction Model (ECM). The study uses secondary data. Results of the study shows that supply of maize farmers is influenced by price of soybeans, wages of labor, prices of seed, of urea fertilizer, of feed, and of imported maize. Maize farmers are also responsive to changes in maize prices and therefore the policy of maize floor price can be re-applied to support the national food self-sufficiency. In addition the input subsidy and land expansion policies are still necessary to increase maize supply.