Economic Development, Food Demand and the Consequences for Agricultural Resource Requirements (Indonesia)

This paper analyses food demand patterns of Indonesian households from a resource intensity perspective, and quantifies the impact of changed demand patterns on the use of three major resource inputs -fossil fuel, land and water – in agricultural production. 13 major food items are categorised into low, moderate and high resource intensity, and income elasticity and Engel curves are estimated for the period from 1997 to 2007. Additional resource use due to changes in demand is quantified by controlling for real expenditure growth over the study period as well as consumption and budget share changes. The results show that income growth in Indonesia is associated with demand patterns that are more resource intensive. Per capita requirements of fossil fuel, land and water increased by 3.13(MJ), 1.24(m2) and 2.1(KL) respectively relative to 1997 unit consumption levels. This study shows that at least for Indonesia, economic development will enhance challenges surrounding resource management, given the increased pressure on natural resource use resulting from food demand. The approach provides a useful foundation for further study into other developing countries similar to Indonesia in affirming connections between economic development and food demand that is more resource intensive.

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 Record created 2017-04-01, last modified 2018-01-22

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