Effects of COVID-19 on Food Demand in Rural Indonesia: The Case of Bengkulu Province

Abstract

This paper examines food demand before and after the outbreak of COVID-19 and studies the effects of the situation on households’ demand for food in rural Indonesia, in the case of Bengkulu Province. The research data is taken from the Indonesia Socio-Economic Survey (SUSENAS) as a microdata set which is collected annually by Indonesia Central Statistics Agency (BPS) from 2017 to 2021. The effect of COVID-19 on food demand estimates using the Quadratic Almost Ideal Demand System (QUAIDS). The results demonstrate that prepared food expenditure is the largest portion of household expenditure on food in the Bengkulu rural area. Before the outbreak of COVID-19, animal source food is the most sensitive to food expenditure, but after the outbreak, prepared food is the most sensitive. Staple food is the most expenditure-inelastic before and after the outbreak. Expenditure for animal source food, vegetables & fruits, and prepared food have significant differences between before and after the outbreak. All the food groups substitute for each other before the outbreak, whereas staple food and prepared food cannot be regarded as a substitute for each other after the outbreak. There are eleven of the compensated price elasticities whose differences between before and after the outbreak are significant, whereas as a set the compensated price elasticities are significantly different between before and after the outbreak. Other food is the easiest to be substituted for both phases. Prepared food is the most difficult to be substituted before the outbreak, but the staple food is the most difficult to be substituted after the outbreak. After the outbreak of COVID-19, the demand for vegetables & fruits increases, but the demand for staple food and prepared food decreases, ceteris paribus. Family size, children, gender, age, and other demographics variables have an impact on household food demand. These findings imply that after the outbreak, the supply of vegetables & fruits should be increased and that government support for suppliers of staple food and prepared food will be preferable.