**1. Introduction**

It is estimated that the Indonesian economy will suffer a loss of at least IDR 100 trillion (~USD 6.7 billion) annually in the period of 2019–2024 due to climate change (CC). The estimation comes only from four economic sectors that are heavily impacted by CC: agriculture, marine and fisheries, water resources, and health. Among others, agriculture (rice sector) is the hardest hit with a total loss

amounted to IDR 30 trillion per year, and more than 10 million farmers suffer a production loss of 30–60%. Furthermore, the production loss in the rice sector will impact national food security since rice is the staple food in Indonesia. Adaptation to climate change both at the macro and micro level are required to minimize and even reverse the negative impact of climate change.

Adaptation strategy, both at the national and farm level, are needed to moderate the negative impact of climate change [1]. Adaptation to climate change is grouped into two categories: autonomous and planned adaptation [2]. Autonomous adaptation is adaptation practices taken by farmers using their resources. In contrast, the planned adaptation requires government roles to conceptualize, formulate, and implement the adaptation practices using government resources. The former implemented at the micro/farm-level while the latter conducted at the macro/national level. Several studies have reported that farmers in developing countries have adjusted their farming practices in response to CC and found that the adaptation has a positive effect on crop yield [3, 4]. However, several barriers limit adaptation practices, such as financial barriers (lack of financial resources and lack of supporting institutions, whether public or private, to finance adaptation), social and cultural barriers (individuals and group perspectives, values, and beliefs toward CC), and informational and cognitive barriers (individual perceptions, values, and opinions about the risk of CC) [5]. This study focuses on the third barrier and specifically individual climate risk perception.

A farmer's perception of climate risk is essential because it represents the degree of perceived impact (P-I)—a measure of how a farmer personally feels about the impact of a particular occurrence [6, 7]. Past exposure to climate-related disaster increases the degree of P-I, which in turn drives farmers to undertake adaptation actions [8, 9]. Although some studies stressed the benefits of autonomous adaptation, other studies reported that it ultimately results in unintended maladaptive outcomes, such as increasing the farmer's vulnerability to CC, shifting the vulnerability to other stakeholders or sectors, and decreasing the quality of common pooled resources [10, 11]. Thus, assessing a farmer's P-I toward CC is essential in two aspects: first, it provides valuable information about the efforts to encourage autonomous adaptation; second, it provides crucial insight into the effort to avoid maladaptation practices. As most developing countries have a national adaptation policy [12], this study contributes to addressing the question of which farmers should be prioritized and through what channel the content of a policy should be delivered. **Figure 1** shows how climate risk perception is related to autonomous adaptation and adaptation outcome.

The role of climate risk perception in CC adaptation has received considerable attention. A study in Bangladesh showed that farmer perceptions of CC are mostly aligned with observed meteorological data and are correlated positively with the rate of adopted adaptation practices [9]. Similarly, a study in French coastal populations showed that they perceive the local changes in climate, weather, coral, and beaches. Still, they only regard it as a problem instead of a danger [13]. In contrast to the result from France, a study on the peri-urban community in Mexico that experiences a risk of drought indicated that the community perceives CC and treats it as a threat because their livelihood as brick producers is severely impacted by climate change [14]. A study on Canadian bivalve aquaculture indicated the importance of stakeholder perceptions of CC in adapting to these changes and further expanding the industry [15]. A cross-country analysis in Europe indicated that the perception of CC is affected by individual-level factors such as gender, age, political orientation, and education. Still, the size of the effects of each variable varies across countries [16].

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production [17].

*Improving the Efficacy of Climate Policy in the Indonesian Rice Sector: The Potential Use…*

This chapter focuses on identifying Indonesian rice farmer's characteristics that affect the perceived-impact of climate change. Understanding these characteristics is crucial to improve the effectiveness of climate policy since the probability of a farmer to adopt adaptation practices increase with the degree of their perceivedimpact of climate change. Furthermore, understanding these characteristics assists the policy implementation-body to locate policy beneficiaries. This chapter is structured as follows; the next section provides an overview of Indonesian smallholder rice farming. The third section discusses Indonesia national framework of climate change adaptation, the RAN-API. The fourth section reviews the findings of our study on factors affecting the degree of perceived-impact of climate change on Indonesian smallholder rice farming. The fifth section explains the policy instruments to improve the effectiveness of Indonesian climate action. And the last

*Perceived-impact of climate change increase autonomous adaptation and affect adaptation outcome (source:* 

Rice is the most important food crop in Indonesia. The harvested area for Indonesian rice in 2019 reached 10.68 million hectares, with the highest harvest occurring in March of 1.72 million hectares. Indonesia's rice production in 2019 reached 54.60 million tons, with the highest amount of rice production occurring in March at 9.17 million tons. Rice is cultivated throughout Indonesia, but the majority of farmers are on the island of Java. The percentage of rice farmers in Java Island is 55%, followed by Sumatra Island at 9%, Kalimantan Island at 7%, and Sulawesi Island at 6%, while the remaining 20% is spread across other islands. 46% of paddy land is on the island of Java, 14% on the island of Sulawesi, 12% on the island of Sumatra, 8% on the island of Kalimantan, and the remaining 20% is spread over other islands. In 2019, rice production in Indonesia decreased by 4.60 million tons compared to the previous year. Climate change is the leading cause of this decline in

Climate change is the main factor causing a decrease in rice production in Indonesia. Changes in the intensity and frequency of rainfall, as well as an increase

*DOI: http://dx.doi.org/10.5772/intechopen.94004*

section concludes the chapter.

**Figure 1.**

*Authors work).*

**2. Overview of Indonesian rice farming**

*Improving the Efficacy of Climate Policy in the Indonesian Rice Sector: The Potential Use… DOI: http://dx.doi.org/10.5772/intechopen.94004*

#### **Figure 1.**

*Recent Advances in Rice Research*

even reverse the negative impact of climate change.

specifically individual climate risk perception.

adaptation and adaptation outcome.

amounted to IDR 30 trillion per year, and more than 10 million farmers suffer a production loss of 30–60%. Furthermore, the production loss in the rice sector will impact national food security since rice is the staple food in Indonesia. Adaptation to climate change both at the macro and micro level are required to minimize and

Adaptation strategy, both at the national and farm level, are needed to moderate the negative impact of climate change [1]. Adaptation to climate change is grouped into two categories: autonomous and planned adaptation [2]. Autonomous adaptation is adaptation practices taken by farmers using their resources. In contrast, the planned adaptation requires government roles to conceptualize, formulate, and implement the adaptation practices using government resources. The former implemented at the micro/farm-level while the latter conducted at the macro/national level. Several studies have reported that farmers in developing countries have adjusted their farming practices in response to CC and found that the adaptation has a positive effect on crop yield [3, 4]. However, several barriers limit adaptation practices, such as financial barriers (lack of financial resources and lack of supporting institutions, whether public or private, to finance adaptation), social and cultural barriers (individuals and group perspectives, values, and beliefs toward CC), and informational and cognitive barriers (individual perceptions, values, and opinions about the risk of CC) [5]. This study focuses on the third barrier and

A farmer's perception of climate risk is essential because it represents the degree of perceived impact (P-I)—a measure of how a farmer personally feels about the impact of a particular occurrence [6, 7]. Past exposure to climate-related disaster increases the degree of P-I, which in turn drives farmers to undertake adaptation actions [8, 9]. Although some studies stressed the benefits of autonomous adaptation, other studies reported that it ultimately results in unintended maladaptive outcomes, such as increasing the farmer's vulnerability to CC, shifting the vulnerability to other stakeholders or sectors, and decreasing the quality of common pooled resources [10, 11]. Thus, assessing a farmer's P-I toward CC is essential in two aspects: first, it provides valuable information about the efforts to encourage autonomous adaptation; second, it provides crucial insight into the effort to avoid maladaptation practices. As most developing countries have a national adaptation policy [12], this study contributes to addressing the question of which farmers should be prioritized and through what channel the content of a policy should be delivered. **Figure 1** shows how climate risk perception is related to autonomous

The role of climate risk perception in CC adaptation has received considerable attention. A study in Bangladesh showed that farmer perceptions of CC are mostly aligned with observed meteorological data and are correlated positively with the rate of adopted adaptation practices [9]. Similarly, a study in French coastal populations showed that they perceive the local changes in climate, weather, coral, and beaches. Still, they only regard it as a problem instead of a danger [13]. In contrast to the result from France, a study on the peri-urban community in Mexico that experiences a risk of drought indicated that the community perceives CC and treats it as a threat because their livelihood as brick producers is severely impacted by climate change [14]. A study on Canadian bivalve aquaculture indicated the importance of stakeholder perceptions of CC in adapting to these changes and further expanding the industry [15]. A cross-country analysis in Europe indicated that the perception of CC is affected by individual-level factors such as gender, age, political orientation, and education. Still, the size of the effects of each variable varies across

**228**

countries [16].

*Perceived-impact of climate change increase autonomous adaptation and affect adaptation outcome (source: Authors work).*

This chapter focuses on identifying Indonesian rice farmer's characteristics that affect the perceived-impact of climate change. Understanding these characteristics is crucial to improve the effectiveness of climate policy since the probability of a farmer to adopt adaptation practices increase with the degree of their perceivedimpact of climate change. Furthermore, understanding these characteristics assists the policy implementation-body to locate policy beneficiaries. This chapter is structured as follows; the next section provides an overview of Indonesian smallholder rice farming. The third section discusses Indonesia national framework of climate change adaptation, the RAN-API. The fourth section reviews the findings of our study on factors affecting the degree of perceived-impact of climate change on Indonesian smallholder rice farming. The fifth section explains the policy instruments to improve the effectiveness of Indonesian climate action. And the last section concludes the chapter.

#### **2. Overview of Indonesian rice farming**

Rice is the most important food crop in Indonesia. The harvested area for Indonesian rice in 2019 reached 10.68 million hectares, with the highest harvest occurring in March of 1.72 million hectares. Indonesia's rice production in 2019 reached 54.60 million tons, with the highest amount of rice production occurring in March at 9.17 million tons. Rice is cultivated throughout Indonesia, but the majority of farmers are on the island of Java. The percentage of rice farmers in Java Island is 55%, followed by Sumatra Island at 9%, Kalimantan Island at 7%, and Sulawesi Island at 6%, while the remaining 20% is spread across other islands. 46% of paddy land is on the island of Java, 14% on the island of Sulawesi, 12% on the island of Sumatra, 8% on the island of Kalimantan, and the remaining 20% is spread over other islands. In 2019, rice production in Indonesia decreased by 4.60 million tons compared to the previous year. Climate change is the leading cause of this decline in production [17].

Climate change is the main factor causing a decrease in rice production in Indonesia. Changes in the intensity and frequency of rainfall, as well as an increase in air temperature, have a significant effect on decreasing rice production in Indonesia. For example, during El Nino, rainfed lowland rice production in Maluku decreased by 2.9% [18]. Then, an increase in temperature of 10°C increases the rainfall by 5% and decreases rice production in North Sulawesi from 6.86 tons/ha to 6.33 tons/ha [19]. An increase in air temperature of 0.4–0.6°C and a decrease in rainfall of 0–197 mm reduce rice productivity in South Sumatra by 0.59% annually. Similarly, Rice productivity in Malang Raya also decreased by 1.59% per year due to an increase in air temperature of 0.7–0.8°C and a decrease in rainfall of 0–550 mm [20].

At the farm level, climate change increases the risk of farming and decreases farmers' income. For example, climate change increases the risk of pest and disease attacks in Subak Penebel District, Tabanan Regency [21]. Then, the flood that occurred in Rawang Panca Arga District, Asahan Regency reduced rice production by 0.60% and caused a total farm loss of IDR 1,256,036 [22]. Furthermore, the floods that occurred during 2006–2010 reduced rice production in West and Central Java by 2.5 tons/hectare and 3.0 tons/hectare; as a result, farmers suffered losses of Rp. 6.5–7.0 million/hectare [23]. These studies show that climate change harms the agricultural sector, especially rice farming, in Indonesia. Government policies to mitigate the impacts of climate change on the agricultural sector are required.

Government policies to mitigate the impacts of climate change are crucial to minimizing losses due to climate change [24]. To overcome the risk of crop failure and decreased productivity due to climate change and pest outbreaks, the government issued a rice farming insurance program (AUTP). The AUTP has a premium price of IDR 36,000/hectare/season and provides benefits for farmers of IDR 6,000,000/ha/season if damage to farming reaches ≥75% [25]. Farmers well receive this program because it helps them provide farming capital for the next planting season when they experience failure in farming [26]. However, farmer participation in this program is low, even though the government subsidized the premium by 80% [27]. It shows that a more comprehensive policy framework and a careful implementation of that policy are required to mitigate the impact of climate change on rice farming in Indonesia.
