IMPACT OF CLIMATE CHANGE ON FOOD PRICE IN THE AFFECTED PROVINCES OF EL NINO AND LA NINA PHENOMENON: CASE OF INDONESIA

Abstract

Climate change has become a global issue because it has a wide impact on a country’s socio-economic condition. The main factor influencing climate change in Indonesia is El Nino Southern Oscilliation (ENSO), consisting of three phases: El Nino, La Nina and Normal. ENSO plays an important role in climate variations and intensity of rainfall so that it can affect the agricultural sector, especially the food crops sub-sector which is very vulnerable to climate change. This research examines the impact of climate change on food prices i.e rice, maize and soybean using the static panel method. Cross section data focuses on the most 10 affected provinces of the ENSO phenomenon, while the time series data is used from 2011Q1 until 2016Q4. The result shows that El Nino significantly affects the increase of rice and soybean prices and the decrease of maize price. While La Nina significantly affects the increase of rice price. In general, El Nino has a bigger impact on food prices compared to La Nina.

Keywords

• agricultural economics
• climate change
• food prices