Food Security Program in the Time of Economic Crisis: a lesson to learn from Indonesia

This study evaluates the impact of food security program – an almost universal program of Indonesian Social Safety Net Program in the time of economic crisis. Food security program aimed to protect poor households from the negative effects of economic crisis by means of highly subsidized rice. To assess the impact of the program, this study utilizes matching estimator approach combined with difference in difference method. The rich longitudinal dataset used in this study enables matching estimator and difference in difference approach to provide accurate estimate of the program’s impact on its beneficiaries. Results indicate the positive impact of the food security program on the expenditures of richer nutrient food which include meat, fish and dairy products. The program has also substantial impact on health expenditure. In addition, this study finds fly-paper effects where food security program has increased rice and staple food expenditures in the short period. Aid-fungibility is also evident since the program has positive effect on adult goods expenditure. The implication is that improved targeting or applying conditionality might mitigate the unintended effects resulting from the program.