Government Intervention in Agricultural Market
Some of the policies, strategies, programs and projects of development have been conducted by government for improving of farmer welfare, in order to become an economic agents that is able to compete in market. Government must conduct intervention because the farmers are the marginal society.
Based on Stiglitz (1988), the government paid more attention to the one group of society because of market failure. The market failure is defined as the emergence of the development problems due to lack of fulfillment of the development assumptions. These assumptions are: similarity information and the ability and accessibility to the economic resources. In this context, the government’s attention to the farmers especially rice farmers has objective to correct market failure that caused immersed farmers fate.
This paper describes various government interventions especially in agricultural sector in Indonesia. The reasons for choosing agricultural sector are:
1) Contribution of agricultural sector in the Gross Domestic Product formation is very large
2) The most of people work as farmers.
3) The government’s intervention to the agricultural sector is very large especially to fulfill basic need of the society.
The orders of discussion of this paper are:
1) The beginning of the papers will explain about the background of the government decide the kind of intervention that will be implemented
2) Describing of the economic theory what support to the intervention that will be implemented
3) The last, Describing of the critical analysis toward government intervention accompanied the relevant case study
