Reduced productivity and increased demand for soybean products has increased dependency on soybean imports and support for tariffs. This study involved a desk top analysis and interviews with key stakeholders (soybean farmers, traders, and government officials) in Blitar, East Java, to develop farm level production budgets based on traditional and improved production technology (improved seed and water control, monoculture and multi-cropping). The Policy Analysis Matrix was used to analyse the competitiveness of different soybean cropping systems, the influence of public investment and the impact of price fluctuations resulting from government policy. Results indicate that all methods of soybean production are both privately and socially profitable. The authors thus conclude that protectionist policies are unnecessary and that Blitar soybean production is competitive with imported soybean. Investments in technology provided greater profits than traditional soybean production while improved technology, multi-cropping and non-irrigated land provided the highest private and social benefits. The authors recommend that any policy should promote and distribute welfare amongst all soybean chain stakeholders.

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