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Local governments and farmers throughout Indonesia must be prepared to meet the challenges that come with MEA. This is due to the ratification that the Indonesian government has made to become part of the MEA. The MEA aims to become the basis of primary regional market, as well as becoming the basis of primary regional production. In the end, becoming the MEA aims to develop regions that have the qualities that can compete in the global market, and a proportionate market competitiveness in a regional scale. However in reality, majorities of Indonesian farmers are low-scale and minor farmers with small lands, thus highly prone to fluctuation and changes in the price of agricultural commodity. The question is whether Sidoarjo as the one of the primary region of rice production in Indonesia, and its local government, are prepared to face the challenges that comes with MEA. This research aims to analyze how the local government of Sidoarjo prepares itself for the challenges that comes with MEA. The primary method that is used in this research is the Delphi method; the Delphi method works by collecting experts’ opinions these opinions then is used to construct the policies that may be implemented to face the challenges of MEA. In the local government level of Sidoarjo and between the farmers Focus Group Discussion (FGD) was held. This research founds that Sidoarjo in facing the challenges of MEA sets innovative policies to increase food productivity, in particular food-based crop such as rice. This is done by implementing policies such as; Sustainable Farmland Policy (LP2B) written in The Act on Agriculture No. 41 Year 2009, by means of bridging a continuous coordination between the executive and legislative branch; as well as, maintaining the Regional Landscaping Plan (RTRW); assuring the government’s special effort (UPSUS) in food selfsufficiency by making reparation in the irrigation system, and production facilities, land optimization, and lastly development of System of Rice by means of intensification. Also, the Movement on Implementation of Integrated Management of Crop (GP-TPP) as well as, the procurement of agricultural machinery and tools (ALSINTA).

CHALLENGES OF LIBERALIZATION: ASEAN ECONOMIC TRADE IN THE CASE OF FARMERS AND REGIONAL GOVERNMENT IN SIDOARJO (EAST JAVA, INDONESIA)