Note: PP = Producer price IDRkg
MP = Rice miller price IDRkg WP = Wholesaler price IDRkg
RP = Retailer price IDRkg
α = the coefficient of Error Correction Model = the coefficient of dynamic short-run
θ = the slope of long-run equilibrium c = the constanta
V RESULTS AND DISCUSSION
5.1 Rice Price Volatilities
The price volatilities in each market institutions are shown by standard deviation of return in the Table 3. Producer price has the highest price volatility
by 24,90. Whilst, rice miller price and wholesaler price have lower volatilities than producer price by 18,30 and 18,10, respectively. The retailer price has
the lowest volatility by 8,7. This result shows that the magnitudes of the price volatility from producer to consumer are decreasing. Farmers in production
market face very high volatility of producer price, meanwhile consumers receive stable price. This unbalance condition is not good for farmers and the market
efficiency.
Table 3 The price volatilities of producer, rice miller, wholesaler, and retailer
Variable PP
MP WP
RP Period
SD SD
SD SD
2000-2012 0,249
- 0,183
- 0,181
- 0,087
- 2000-2006
0,279 -
0,165 -
0,188 -
0,089 -
2007-2012 0,207 25,96
0,205 24,19
0,173 -8,34
0,084 -5,43
Note: Asterisk sign indicates reject Ho: there is no difference between two variances
H
o
: σ
2 1
≤ σ
2 2
, at 95 level of significant
The high volatility of producer price is reasonable due to the price gap of seasonal prices. The rice price at producer level in the harvest time is low because
the abundant of rice supply in the market. On the contrary, the rice price is high in non-harvest time when the supply is shortage. The gap production is too big
between main harvest in February-March which produces 60-65 of total production and the other two harvest time which produce 25-30 and 5-15 of
total production. The capacity of Bulog, which only can purchase 7-8 of total production cannot balance rice price for along the year. The government
instrument to purchase the excess of supply in harvest time cannot dampen the
