LAUSR

ABSTRACT Government in Southeast Asia plays a crucial role in the rice sector. It intervenes in rice production in order to increase the country’s production and to achieve self-sufficiency in rice production. How does the government’s policy affect rice production? This paper examines the policy effect of government assistance on rice production in Southeast Asian countries and it argues that the less likely government is to impose tax barriers on the rice sector and to control prices, the more likely is rice production to increase. Studying the relation between rice policy and rice production in Southeast Asia, the paper finds that a decline in the state’s tax intervention in the rice sector helps to increase rice production in both rice exporting and importing countries. In addition, the results show that political liberalization leads to an increase in rice production. Therefore, a reduction in tax barriers and the abandonment of the state’s price control are state policies that encourage rice production in the long run.