Achieving Self-Sufficiency Through Sugar Supply and Demand Policies (Dynamics System Approach)

Abstract

In 2010 to 2016, Indonesia imported white crystal sugar (WCS) to fulfill the household consumption. The objectives of this research are to: 1) examine the possibility of achieving self-sufficiency of WCS without the policy of National Sugar Industry Revitalization (NSIR), 2) analyze the impact of NSIR policy on the achievement of national sugar self-sufficiency, and 3) formulate an alternative policy of WCS production. This study used primary and secondary data. The primary data collection was conducted by interviewing the respondents, including sugar cane farmers, representatives from the Center for Sugar Research and Development (P3GI), National Plantation Company (PTPN) XI, Indonesian Ministry of Agriculture, as well as from the sugar factory representatives. Secondary data were taken from related institutions, i.e., Indonesia’s Central Bureau of Statistics (BPS), sugar factory, and Indonesian Ministry of Agriculture. The modeling simulation is conducted using Powersim studio software to analyze national sugar industry from 2010 to 2025. The analysis period is based on the implementation year of the NSIR policy. The model behavior in actual condition indicates that national self-sufficiency is not achieved without the implementation of NSIR policy as indicated by the negative supply of WCS during the simulation period. Therefore, a joint NSIR policy is required to achieve national self-sufficiency. Applying 8 (eight) policy scenarios, results of the research show that: 1) in partial, the scenario of NSIR policy fails to support the achievement of national sugar self-sufficiency, 2) policy simulation of scenario 5 (demand side), i.e., the reduction of WCS consumption can make Indonesia achieves national sugar self-sufficiency, and 3) simultaneous NSIR policy on scenario 4 (supply side), i.e., the land expansion, productivity, and sugar yield, can make Indonesia achieves national sugar self-sufficiency.