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Government Intervention in Agriculture Industry in Indonesia Essay

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Nowadays in Indonesia, Fruits and vegetables have become rare items due to slow distribution and poor transportation (TheJakartaPost, 2010). This will cause price of fruits and vegetables to increase due to shortage of supply. Not only that, inequality in distribution of income by farmers has take place due to lack of capital acess (TheJakartaPost, 2010). The market economy requires institution such as government to implement policies and making decisions to maintain market and avoid market failures like monopoly and negative externalities. Government intervention such as decision to guarantee continuous supplies of horticultural products will not only complement the high demand and needs for nutrition by society, but it will also avoid price to increase due to shortage in their supply and creating more equal distribution of income. Therefore, government interventions are clearly crucial in the economy to maintain the balance of price and maximizing social and economic welfare to improve market outcomes.
According to Horticulture Director General Achmad Dimyati (2010), Indonesia has...


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