Introduction

The financial crisis started in the summer of 2007 and intensified in September 2008. Financial giants such as Bear-Stearns, Lehman Brothers, Merrill-Lynch, AIG, and Citigroup have either disappeared or been rescued through large government bailouts.

While the U.S economy initially appeared surprisingly resilient to the financial crisis, which is clearly no longer the case. The crisis that started in United States has spreaded to other countries, including Indonesia.

The crisis started to have an impact in Indonesia's industry sector in around June 2008. The rate of unemployment in Indonesia surprisingly fell from 9.8 percent to 9.1 percent in August 2008, but many sources predict that the rate will increase to 9.5 percent by this year. According to M. Chatib Basri, staff of the Coordinating Minister for Economy experts, the global crisis in Indonesia will not become as bad as the previous 1998 crisis where the economic growth was -13.8 percent and the inflation rate reached 77 percent. "What is happening is a slow-growing economy", said Basri. Even though the external sector is the sector that directly hit, the domestic sector can be a helping hand and consumption can still be maintained and thus, the economy can still grow to approximately 4-5 percent in 2009.

This paper provides the causes and effects in Indonesia's economy through agriculture’s perspective. We will begin by introducing causes of the financial crisis and then continue to its effects on Indonesia’s agriculture.

Problems

This global financial crisis cause by mortgage loan crisis. So initially, the United States occurred in the booming property, people were in a hurry to buy houses, with the assumption the price will continue to rise. Arrogantly, U.S banks continue giving ownership loan (mortgage) without noticing the debtors’ profile. Even the unemployment got the mortgage loan. Unfortunately, in 2006 property prices decreased dramatically. Prices went down but the interest rate of mortgage was stable, this caused debtors with the bad credit profile cannot pay the loan.

When the fail-to-pay conditions happen, it will not be a problem if only a certain party only, and increased significantly at the same time. Because of a lot of houses that sealed, the number of house sold is increasing in order to cover the jammed credit. This course offers the house far exceeds the demand so that house prices fall. The fall of house’s price gives an impact of price guarantee on the value of a house that does not match the value of the loan, which eventually caused the failure-to-pay a lot.

Worse, the investment banker used sub prime mortgage derivatives. When jammed credits increased, banks were facing losses, subprime investment directly fell, caused a result of liquidity so sluggish. Investors’ money in the Indonesian stock exchange immediately drawn to their home country because investors need liquidity. Our government can not make foreigners invest in Indonesian real sector again, because all of the capital flew back to their home country. Speculators were taking benefits from dollar fluctuations on the sale and purchase, this makes Rupiah rates pulled and even reached 12.000 rupiahs per US$.

Description Data

The influence of the global crisis that occurred in Indonesia at this time does not only haunt economic life of the people of Indonesia, the concrete is also the global crisis dragged all ready to bear impact of mass mass poverty, mass worker termination, and social issues that arise. Global crisis also attacks the farmers, especially farmers in market-oriented production exports. They were the ones of the first victims to feel the impact of global crisis, decreased purchasing power due to the international market. So that the fate of farmers are getting clearer, termination.

Of the global price increase, food prices in Indonesia tend to be more stable, except for cooking oil and soybeans. When Indonesia imports, the threat in front of the rice price increase is a result of global price increase 133% in the period January-May 2008 (FAO: Food Outlook, May 2008).

Conclusion

Impact of scarcity of food in a very serious global scale is actually one of the valuable lessons of various policies in various countries, which in the last few decades tend to put agricultural development priorities aside.

This food crisis could be viewed from the positive and negative sides as the threats and opportunities for the rise of national agriculture. Indonesia as a country that still proclaim itself as the state agricultural policy must take a clear and comprehensive with the rise of agriculture-related.

Reference

http://www.futureblind.com

http://mukti-aji.blogspot.com

http://pc.blogspot.com

http://www.grinningplanet.com

http://www.detik.com