ABSTRACT
Agricultural economists engage in work ranging from farm-level cost accounting to assessing the consumer impact of food safety and nutrition labeling to analyzing worldwide agricultural trade patterns and a host of other real-world issues. The existence of linkages between the agricultural sector and the rest of the economy points to the specificity of that sector and justifies why a macroeconomics of agriculture is even possible. Agricultural microeconomists have also sought to create supply and demand curves for particular agricultural commodities based on neoclassical assumptions regarding perfect markets, traditional assumptions about the elasticity of demand for food staples and the largely price-taking position of the overwhelming majority of agricultural producers. Agricultural commodities have three main uses: food, feed and fuel. Indonesia’s policies on food self-sufficiency favour investment in food industries rather than the non-food and cash crops industries. Descriptive economic analysis at the macro level can accurately portray consumer government expenditure on food.
