The Nexus Between Rice Prices, Rice Production and Rice Consumption on Food Price Inflation in Aceh Province

Abstract

This study aims to analyze the effect of rice prices, rice production, and rice consumption on food inflation in Aceh Province using the panel data regression method for the 2018–2024 period. Based on the results of model selection, the Chow test selects the Common Effect Model (CEM), while the Lagrange Multiplier (LM) and Hausman tests select the Random Effect Model (REM), so the best model used is REM. The estimation results show that in general all independent variables are not significant at the 5% significance level. However, at the 10% significance level, the rice price variable (HB) with a probability value of 0.0953 and rice consumption (KB) with a probability of 0.0650 is close to significant, while rice production (PB) is not significant with a probability of 0.3065. Simultaneously, the three variables also have no significant effect on food inflation as indicated by the Prob (F-statistic) of 0.268898. Thus, it can be concluded that rice prices and rice consumption tend to influence food inflation at a 10% significance level, while rice production has no significant effect in Aceh Province.

Based on these results, it is recommended that the government focus more on maintaining rice price stability through price control policies, strengthening distribution, and effective food stock management to reduce price fluctuations in the market. Future research should include other variables such as distribution, rice imports, and climate factors, as well as use a longer data period to provide more comprehensive analysis and more accurate explanations of food inflation dynamics.