The Impact of Clove Import Policy on Clove Market and Cigarette Production in Indonesia
- DOI
- 10.2991/fanres-18.2018.55How to use a DOI?
- Keywords
- clove market, cigarette, import policy
- Abstract
Indonesian government has applied clove import policy (which import only through licensed importer). The policy had caused consequences to the clove market and cigarette production. The aim of this research was to analyze the impact of the policy on clove market and cigarette production in Indonesia. This research used data series of 1990-2016 with the model of simultaneous equation system that have been estimated using 2SLS (Two-Staged Least Squares) method. The results showed that impact of clove import policy dropped the supply of clove, meanwhile demand of clove rose. Domestic clove price decreased both on industry by 3,02 percent and on farmer level by 3,96 percent and it cause the production of cigarettes increased by 0,31 percent. In the long run, the area of clove will decrease by 0,1 percent and decreased clove production by 0,03 percent. Impact of this policy more beneficial for cigarettes industries than for clove farmers. The decrease of clove price in the long period can impact on the sustainability of Indonesian clove production and can threaten the existence of Indonesian clove in the next future. Therefore, cooperation between farmers and cigarette industries and development of clove products is needed
- Copyright
- © 2018, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Antik Suprihanti AU - Bonar M. Sinaga AU - Harianto Harianto AU - Reni Kustiari PY - 2018/11 DA - 2018/11 TI - The Impact of Clove Import Policy on Clove Market and Cigarette Production in Indonesia BT - Proceedings of the International Conference on Food, Agriculture and Natural Resources (FANRes 2018) PB - Atlantis Press SP - 273 EP - 278 SN - 2352-5401 UR - https://doi.org/10.2991/fanres-18.2018.55 DO - 10.2991/fanres-18.2018.55 ID - Suprihanti2018/11 ER -