Journal of Economics Business Industry
Vol. 3 No. 1 (2025): July

The Buffering Role of Food Security in the Relationship between Food Price Volatility and Farmer Poverty

Asri Ambariah (Universitas Muhammadiyah Makassar)
Andi Din Mahsyar Magribi Usdar (Universitas Muhammadiyah Makassar)
Frederik Katupu (Universitas Muhammadiyah Makassar)
Bernadetha Lista (Universitas Muhammadiyah Makassar)
Patrick Antonio (Universitas Muhammadiyah Makassar)
Dalila Aurelia (Universitas Muhammadiyah Makassar)



Article Info

Publish Date
29 Jul 2025

Abstract

This study examines the relationship between food price volatility, food security, and farmer poverty in six provinces of Java, Sumatra, and Sulawesi, Indonesia, over the period 2015-2023. Using a balanced panel dataset compiled from the Central Bureau of Statistics (BPS), the Food Security and Vulnerability Atlas (FSVA), and Bank Indonesia consumer price data, this study employs a two-way fixed-effects panel regression model augmented with an interaction term to capture the moderating role of food security on the poverty-volatility nexus. The results indicate that food price volatility exerts a statistically significant positive effect on farmer poverty rates (b = 0.389, p < 0.01), while food security exhibits a significant negative effect (b = -0.297, p < 0.01). The interaction term between food security and food price volatility is negative and significant (b = -0.081, p < 0.05), confirming that higher food security attenuates the adverse poverty effects of price volatility. These findings contribute to the literature on agricultural poverty traps by providing province-level evidence from a major developing economy and by quantifying the buffering capacity of food security systems. Policy implications point toward the urgency of strengthening national food reserves, improving market integration, and expanding social protection for smallholder farmers.

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Journal Info

Abbrev

Jebin

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

Journal of Economics Business Industry is a journal through a peer-review process.  Journal of Economics Business Industry for academics and researchers to publish their articles which is an original text that has not been published in another journal. The focus and scope are in the fields of ...