The impact of the Vietnam Sustainable Agriculture Transformation (VnSAT) program on the performance of Indonesian rice

Abstract

The price of rice in the world market greatly influences prices in the domestic market, one of which is the price of rice in Vietnam, Indonesia’s largest rice exporter. The increase in rice prices in Vietnam under the Vietnam Sustainable Agriculture Transformation (VnSAT) program affected the performance of Indonesian rice. This research aims to determine the impact of the VnSAT program on the Indonesian rice version. Data analysis uses simultaneous equations with the two-stage least squares (2SLS) estimation method. The research results show that the effects of the VnSAT program, through an increase in Vietnamese rice prices by 20% and 29%, are relatively small on the performance of Indonesian rice, causing domestic rice prices to decrease by 0.0015% and 0.0030%, rice supply to decrease by 0.0006% and 0.0008%, and demand for rice to increase by 0.000029% and 0.000041%. This implies that external policies from Vietnam did not influence the performance of Indonesian rice, as Indonesia is Indonesia’s largest rice exporter, so Indonesia does not need to worry if there is an increase in rice prices in Vietnam.