The impact of food price and farmer’s income on the food demand in kurau sub-district, Tanah Laut Regency of South Kalimantan

Abstract

Indonesia is an agricultural country, which places the agricultural sector as the main source of income for its population. South Kalimantan is one of the provinces where some of the population relies on the needs of life in the agricultural sector. Agricultural development in South Kalimantan plays an important role in economic development. The agricultural sector continues to consistently make a considerable contribution to GRDP in South Kalimantan. Along with the role of agriculture at the provincial level, the same trend is also felt in every regency in South Kalimantan, including Tanah Laut Regency. According to the results of Village Potential data in 2021, Kurau Sub-district has the highest agricultural household profile in Tanah Laut Regency. This study aims to look at the characteristics of farmer households in Kurau Sub-district, analyze the structure of the proportion of farmers’ household expenditures, and see the effect of food prices and income on the demand for food in farmer households in Kurau Sub-district. The data was obtained by conducting interviews with 100 farmer households that were randomly drawn using simple random sampling techniques. The analysis methods used in this study are descriptive analysis and the Linear Approximation Almost Ideal Demand System (LA/AIDS) demand model. The results showed that farming households in Kurau Sub-district spend more of their money on food purposes. The results of own price elasticity show that all food groups are inelastic, which indicates that price changes do not change the amount of demand much. The results of cross-price elasticity show that most of the relationships between groups of food commodities are complementary. Meanwhile, income inequality shows that six groups of food commodities are normal groups of goods for farming households in Kurau Sub-district.