ANALYSIS OF MARKET INTEGRATION AND PRICE TRANSMISSION OF RICE IN EAST KALIMANTAN

Market integration and transmission elasticity are indicators of achieving marketing efficiency. Marketing rice as a staple food commodity is important for economic purposes. The objective research was to identify trends in rice prices at the producer and the retailer, to determine market integration, and the elasticity of rice transmission. The research was conducted in East Kalimantan Province. This study used secondary data. The secondary data used are weekly series data of January-December 2023, from The National Strategic Food Price Information Center, Bank Indonesia. Data obtained by Bank Indonesia through The Daily Food Price Survey is a survey conducted by Bank Indonesia. Trends in rice price were analyzed using descriptive analysis, market integration was analyzed using Index Market Connection (IMC), and price transmission was analyzed using price elasticity transmission. The results showed that trends in retail rice prices faced price volatility at 4.62 percent and rice prices at the producer level faced price volatility at 5.37 percent. The rice market in East Kalimantan is not integrated in the short run, but integrated in the long run with IMC > 1 and the integrated coefficient is 1,0949. Transmission elasticity of rice prices in East Kalimantan was 0,7896. Rice prices have not been transmitted efficiently. The policy implication for the government is to improve market price information and rice stock management as a market intervention. Government collaboration with market players, especially rice distributors, can be an alternative to ensure the availability of rice in the region. To improve local food security, regulating planting time, and planting frequency, increasing farm productivity, and guaranteeing output prices is the focus of improving market mechanisms in the region.