REPUBLIKA.CO.ID, JAKARTA - Data obtained by Statistics Indonesia (BPS) shows that link between the fuel price hike and farmers welfare throughout May 2013 is not significant. BPS records May deflation is at 0.03 percent.

"Evidently, farmer's exchange rate increases 104.55 in April to 104.95 in May. The number shows the physiological effects of the increase in fuel subsidy is not too significant," Head of Statistics Indonesia, Suryamin said on Tuesday.

Farmer's exchange rate is one indicator or the ability to see purchasing power of farmers in rural areas. It also shows the exchange of agricultural products with the goods and services consumed by. If the exchange rate higher, the consumption and farmer's purchasing powers is also higher.

BPS records some increases in all agricultural subsectors during May 2013, such as food crops (from 103.84 to 104.23 percent), horticulture (108.27 to 108.98 percent), smallholder tree crops (105.17 to 105.41 percent), farms (101.15 to 101.5 percent), fisheries (105.1 to 105.34 percent). All data show an increase of farmer's welfare in May 2013.

Deputy Head of Distribution and Service at Statistics Indonesia, Sasmito Hadi Wibowo added, Indonesian people more rationals to view inflation expectations due to increase in fuel subsidy. Although the plan is still an issue, they don't make adjustments.

"Purchasing power is still relatively strong, especially ahead of the fasting month and Lebaran. People tend to spend their income. Strong or weak purchasing power will be seen after Lebaran or after August 2013," Wibowo said. 

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