|
home | about us |
divisions & staff | publications |
 |
working paper |
|
home | about us |
divisions & staff | publications |
|
working paper |
| Sharing the Wealth: How villages
decide to distribute OPK rice Benjamin A. Olken, Musriyadi Nabiu, Nina Toyamah, Daniel Perwira Download
Full Report Introduction In response to the financial crisis which struck Indonesia in mid-1997, the government of Indonesia, in cooperation with the World Bank, instituted a food support program called Operasi Pasar Khusus, or OPK. The OPK program was designed to provide first 10kg, and later 20kg, of rice per month to every poor family in Indonesia1. The rice was to be sold at a price of Rp1,000/kg, which represented a substantial subsidy from the market price of over Rp2,000/kg. For a typical poor household receiving the full 20kg of rice at the subsidized price, the subsidy would be equivalent to approximately 10% of annual monthly household expenditure. The rice was distributed through village governments. Each month, rice was delivered to the villages, either directly by the government logistics depots, DOLOGs, or by the village staff, who retrieved the rice from the kecamatan (sub-district) office. Though the list of rice recipients was supposed to follow the national BKKBN social welfare guidelines, in fact, village officials had almost complete authority to determine how the rice would be distributed within their villages. As a result, as has been documented by earlier SMERU reports, the implementation of the OPK program varied dramatically from village to village, even within the same kecamatan. In some areas, the rice was well-targeted to poor families; in others, the rice was simply divided equally among recipients. In yet other areas, it was simply announced that cheap rice was available for sale, and whoever could afford to buy it was allowed to do so. Virtually all aspects of the rice distribution, from the generation of eligibility lists to the amount of rice each household was allowed to buy to the price of the rice, varied dramatically from village to village. The purpose of this study is to try to begin to understand what lay behind the decisions made by village heads as to how to distribute the rice. Which villages distributed the rice evenly, and which were more successful at targeting it to the poor? What aspects of the village made targeting easier or more difficult? What aspects of the villages' underlying economic, social, and political landscape led to the dramatic differences in who received the subsidy, and how much subsidy they received? This study consists of field visits to five villages-three villages in Kabupaten Pandeglang, Banten, and two villages in Kabupaten Semarang, Central Java. The three villages in Pandeglang were three of the villages included in BPS's Survei Seratus Desa (SSD), a panel dataset conducted from 1997 to 1999 in 100 villages, spread across 10 kabupaten (districts) in 9 provinces. The analysis from those villages is therefore supplemented with data from the SSD. Additional background information about the villages comes from BPS's 1999/2000 Potensi Desa dataset. 1Rules have subsequently been changed so that 20kg represents the maximum each family is allowed to receive per month. Summary of Findings The differences in rice distribution had many causes, both economic and political. In all villages we visited, village officials reported that the BKKBN lists were not accurate representations of who in the village was actually poor. Commonly heard was the situation of a family with a good house-and therefore classified as non-poor by BKKBN-but with few other assets and little in the way of income. As a result, all villages we visited making any attempt at targeting rice to the poor created their own list of who was poor. The number of people added to the official BKKBN lists depended on the economic conditions of the village-the more people who were near the poverty line, the more difficult it was for a village to draw distinctions and keep rice concentrated. Therefore, a relatively flat income distribution near the poverty line seemed to lead to a much wider distribution of rice. This is not necessarily bad-in fact, the fact that local governments had the authority to spread OPK rice to such families may have been welfare-improving. A second economic cause of targeting problems was the fact that, in all villages we visited, the rice was sold on a cash-and-carry basis. As a result, many of the very poorest families did not have cash on hand to purchase the total amount to which they were entitled, creating a surplus of rice in the village. Since the village needed to pay for all of the rice received, the surplus was sold to other families, with relatively little effort made to target the surplus rice to poor families. As the team heard from one RT (neighborhood association) head, the instruction from the village head was that all rice must be sold-to whom it was sold was a lower priority. A third economic determinant of targeting effectiveness was the level of prosperity of those not eligible to receive the rice. In all villages, people reported problems with the quality of the rice-it sometimes had a bad smell, and it didn't always stick together properly. As a result, some wealthier families may not have wanted the rice, even if they had been able to obtain it at a cheaper price. Thus, self-targeting may have played a role in villages where the rich were substantially better off than the poor. However, the role of self-targeting may have been limited by the ability of villagers to re-sell the rice on the market. In one village, for example, we found evidence that even though richer families lobbied to receive the rice, once they received it they simply re-sold it to traders, keeping the subsidy without having to eat the inferior rice. Politics seemed to matter more than economics in the two villages we visited in Kabupaten Semarang. In one village, a young, new village head quickly yielded to pressure to distribute the rice evenly, whereas in the other village, in almost all other respects similar, a long-established village head had no problems implementing his decision that rice should only be distributed to the poor. In Kabupaten Pandeglang, we also found that the village with the most open politics during the period, where the village head had regular meetings with residents, including meetings where OPK was discussed, was also the village with the broadest distribution of rice. We also found an inverse relationship between the education of the village head and the targeting of the rice-in the villages we visited, the villages with the worst targeting were the villages where the village head had only a primary school education. Geography may have also played a role in explaining some of the village differences. Operational costs were generally not fully covered by BULOG, and even when they were covered, were the same for all villages in a region. Therefore, the operational outlays varied dramatically between villages close to the kecamatan office, where the rice was dropped by BULOG, and those villages further away. To the extent these costs resulted in increased rice prices, the increased prices could have made targeting the rice to the poor more difficult. What follows is a detailed description of how the program operated in three villages in Kabupaten Pandeglang, Banten and Kabupaten Semarang, Central Java. The three villages in Kabupaten Pandeglang were purposefully selected using data from the SSD to capture differences in social and economic conditions, as well as differences in distribution of OPK rice. The two villages in Kabupaten Semarang were selected because of their similarity in economic conditions but very difference experiences with OPK. Table of Contents INTRODUCTION SUMMARY OF FINDINGS KABUPATEN PANDEGLANG
KABUPATEN SEMARANG
APPENDIX: VILLAGE BACKGROUND INFORMATION |
The findings, views, and interpretations published in this report are those of
the authors and should not be attributed to the SMERU Research Institute
or any of the agencies providing financial support to SMERU.
For further information, please contact SMERU, Phone: 62-21-3193 6336;
Fax: 62-21-3193 0850; E-mail: smeru@smeru.or.id
home | about us | divisions & staff | publications
newsletters | news from the region | ngo database
employment opportunities | links