Enhancing food security through import volume optimization and supply chain communication models: A case study of East Java's rice sector

Abstract

Dependence on imports increases the risk of global price volatility, particularly in the event of disruptions to international trade. Furthermore, global price fluctuations—often beyond the control of local governments—exacerbate domestic price volatility. The rice supply chain in East Java exhibits a complex structure, heavily dependent on intermediaries (middlemen) who dominate distribution channels and suppress grain prices. This dominance by intermediaries leads to profit disparities and diminishes farmers' incentives to increase production and improve harvest quality. Using a Causal Loop Diagram (CLD), this research identifies a reinforcing feedback loop that perpetuates import dependency and a balancing loop facilitated by BULOG’s strategic role in price stabilization and stock management. Dynamic simulations under three import policy scenarios (Import Policy Factors of 0.2, 0.5, and 0.8) reveal the significant effects of these policies on BULOG's stock levels, domestic production, import volumes, agricultural land-use and domestic rice prices. The Import Policy Factor 0.2 scenario supports domestic production, achieving output levels of up to 5,512,795 tons while minimizing dependence on imports, stabilizing domestic rice prices at IDR 13,004 per kilograms and improving farmers' welfare. Conversely, the 0.8 scenario highlights heavy import dependence, with domestic production plummeting to 2,441,428 tons, exposing the sector to global price volatility and undermining the competitiveness of local farmers. The findings underscore the critical need for agricultural land-use diversification into high-value crops, the establishment of equitable regulatory frameworks, and incentives to sustain farmers' productivity. An optimized communication model is proposed to foster collaboration among key supply chain stakeholders—government agencies, BULOG, farmers, intermediaries, and distributors—through accessible digital tools such as dashboards and mobile applications. This approach improves policy transparency, strengthens distribution networks, and promotes price stability, contributing to a more sustainable regional food system. This research provides a strategic framework for integrating import policy, domestic production strategies, and commodity diversification to bolster food security in East Java.