EXAMINING OF PRODUCTION, CONSUMPTION, IMPORTS AND THE EFFECT ON SUGAR SELF-SUFFICIENCY

Abstract

One of the problems faced by Indonesia, which lies in the industrial sector of sugar, that sugar production in the country that cannot meet consumption needs, so do imports from several countries. There is a huge opportunity to improve the national sugar production. Increased production of sugar to meet domestic needs have been programmed by the government through sugar self-sufficiency program. At first, self-sufficiency is to be achieved in 2014, but a number of considerations, postponed until 2019. Self-sufficiency has several benefits, among others; (a) increase the income of sugar cane farmers; (b) to be independent from the State (importers); (c) to create new jobs, and; (d) save on the use of foreign exchange. Although self-sufficiency has strategic benefits, but there are some constraints, namely; (a) sugar factories generally are old; (b) the total area of sugarcane plants dwindling; (c) the price of sugar on the world market is relatively cheap, so employers tend to be happy import, and; (d) it is difficult to get adequate land as possible to increase the production of sugar cane, mainly in Java.

The data were analyzed using multiple linear regressions, that the sugar production is positively correlated with the total area of the sugar cane crop, but negatively correlated with the volume of imports. This finding reinforces the self-sufficient, that the national sugar production can be increased through increased production and reduced imports of sugar cane. Another fact, domestic sugar consumption was positively correlated with domestic production and imports. This means that imports of sugar can be omitted if the national production has been able to self-sufficiency. For the success of self-sufficiency program is deemed necessary to improve the governance of the national sugar. In this case there is a choice, continuing the pattern of the core estate and smallholder (PIR), which is already applied, or implementing contract farming or cooperative farming.