The Profitability and Competitiveness of Rice Farming in Polmas District, South Sulawesi, Indonesia

Agriculture has consistently been a main and central focus of Indonesian government's development strategies and priorities. The sector has performed a major role in developing the Indonesian economy since New Order era. Agriculture has contributed in national economic development by providing employment, food, raw material for industries, and foreign exchange earnings. In addition, since the economic crisis, this sector has continued to show its important role as "buffer sector" in the economy. In 1984 and 1985, Indonesia achieved great success in rice production. In these two years Indonesia did not import any rice due to self-sufficiency reached. And than from 1969 to 1988, Indonesian rice production grew 4.5 percent annually. This led Indonesia move from being the world's largest importer of rice in the 1970s to self-sufficiency in 1985. Unfortunately, this success did not continue for long. Currently, the Indonesian government is importing rice and using a tariff to make itself less dependent on foreign markets. The PAM analysis shows that if tradable inputs and outputs are valued at international prices and domestic resources (land, labor, and capital) are at opportunity costs, rice producers would earn substantial profits. When commodities have positive social profits, the country has a comparative advantage in producing the profit and can compete to international rice market