Approximately 25 million people are food insecure, particularly households engaged in food and cash crop subsistence farming and agricultural wage labor. The majority of them live in the east of the country, where 40 per cent of the population live below the national poverty line, above the 13 per cent national average. Despite stable paddy production, the price of rice is one of the highest in the South East Asia region, with a continued upward trend. In July 2012, rice cost 12 per cent more than the same time last year, while real wages for agricultural labor decreased by two per cent.
Although the Ministry of Agriculture is optimistic and estimates rice production in 2012 to increase by 4.31% from last year, rainfall deficits are reported. Due to the drought situation in the US, the price of imported soybean increased nearly twofold in July. Soybean products are important commodity especially for low income people. Indonesia consumes 2.2 million tons of soybeans per year while the country produces 700,000 tons. As a result, the Government of Indonesia has decided to suspent the five per cent of import tax on soybeans.