UNAIR NEWS 鈥 President Prabowo Subianto recently urged the public to grow chili at home as a strategy to help stabilize chili prices. The suggestion has stirred public discussion. Dr. Tri Haryanto, an agricultural economics lecturer at Faculty of Economics and Business (FEB UNAIR), offered his perspective. He explained that small-scale, household farming is not a new concept, having been widely recognized through terms such as 鈥渉ome farming鈥 and 鈥渦rban farming.鈥
Understanding market dynamics
Dr. Haryanto provided an estimate that if each Indonesian household grew five chili plants in polybags, homegrown chili output could reach approximately 375,000 tons. This would account for about 26鈥27% of the country鈥檚 total chili production and could satisfy nearly half of the population鈥檚 direct consumption needs.
In an ideal scenario, this indicates that household farming could make a tangible contribution to food security, particularly for horticultural crops like chili. However, Dr. Haryanto cautioned that real-world implementation may not yield results exactly as predicted.
鈥淥n one hand, household consumption may decrease as families meet their own needs. On the other, there could be a supply surplus if the extra homegrown produce enters the market. Assuming demand from the hospitality, restaurant, caf茅 sector, food stalls, and industries remains steady, as does supply from conventional farmers, the result鈥攁ccording to economic theory鈥攚ould likely be a drop in prices,鈥 he explained.
Short and long-term implications
Dr. Haryanto pointed out that in the short term, agricultural oversupply can lead to lower market prices and reduced income for farmers. In the long term, however, other factors such as technology adoption could significantly influence outcomes.
鈥淥ver time, farmers may adopt improved cultivation techniques that increase supply more rapidly than demand, potentially creating surpluses. Market laws suggest this would drive prices down. However, with enhanced storage technologies, these surpluses could be stockpiled, thus helping to maintain price stability,鈥 he said.
Effective strategies for price stability
To safeguard price stability, Dr. Haryanto recommended setting standard purchase and selling prices to protect both producers and consumers. 鈥淚n the long run, improving supply is key to stable pricing. This can be supported by increasing chili productivity through the provision of essential agricultural inputs,鈥 he added.
He concluded by suggesting the government introduce crop failure insurance programs, such as the Chili Crop Insurance Scheme (AUTC), modeled after rice crop insurance. Additionally, he emphasized the importance of road infrastructure, noting that chilies must be transported quickly after harvest to avoid spoilage.
Author: Rosa Maharani
Editor: Yulia Rohmawati
