Causal relationship between changes in the price of rice and cayenne pepper and the exchange rate of farmers

Abstract

This research aims to determine the price changes of strategic food (rice and chili) in NTT Province and determine the relationship between changes in the price of strategic food (rice and chili) and the farmer exchange rate in NTT Province. The data used in this research is secondary data in the form of time series data (time series) from the NTT Provincial Central Statistics Agency. The analytical methods used are coefficient of variation and multiple linear regression analysis. The research results show that the price of rice experiences changes that tend to be stable, meaning that the price of rice experiences quite significant price changes from time to time but not on a very large scale. Meanwhile, the price of chili experiences high changes, meaning that the price of chili experiences significant price changes from time to time. The price of rice and NTP have a significant positive relationship, meaning that an increase in the price of rice tends to increase NTP, which is in accordance with the positive coefficient in the regression equation. Meanwhile, the price of chili and NTP have a significant negative relationship, meaning that an increase in the price of chili tends to reduce NTP according to the negative coefficient of the regression equation. Based on the results of this research, it is hoped that the government can overcome the problem of changes that occur by minimizing and stabilizing changes in the price of rice and chili by increasing production and managing supply and demand for rice and chili so as to increase income and welfare.