Technically, serious government intervention in the rice sector in Indonesia has
been undertaken since the late 1960s (Arifin and Krisnamurti, 2004). Nonetheless, partly
in response to the donors demand to liberalise rice market, since the economic crisis of
1997-1998, the Indonesian rice sector has undergone a remarkable period of deregulation.
Even though in recognising the negative impacts of full market liberalisation, the
Indonesian Government has re-imposed a number of policy instruments that had
traditionally been used in the past), various policy modifications were evident (Sidik
2004). Although such deregulation has been largely criticised on the basis that it may
create a threat to national food security for not benefitting the rice farmer, it is also argued
that a food security policy that is based on open market arrangements is both possible and