Seth Mydans, Semari – When hundreds of rough-looking men burst through the alleyways of the nearby town of Kraton two days ago, throwing stones and waving sharpened sickles, most of them came from here in Semari, a placid village of farmers and fishermen.

"Rising prices! Rising prices!" they shouted as they smashed a couple of windows and tried unsuccessfully to set a barrel of kerosene on fire, angered by reports that a Kraton merchant had raised prices.

The police quickly choked off the riot, though shopkeepers had pulled down their metal shutters and retreated into back rooms. The green and blue shutters of most shops remained closed, and the town was still tense.

Half a mile away, Semari seemed as calm as ever. White cows grazed in its bright green pasture and sunshine sparkled from its flooded rice fields. Men smoked quietly on cool porches. Small children, seeing a foreign visitor, called out the only words of English they knew: "One, two, three, four!"

Here on the far eastern tip of Indonesia's main island of Java, the political debate of the capital city of Jakarta seemed worlds away. Currency devaluations, collapsing banks and frightened stock markets are unknown concepts in Semari. No one here has heard of the International Monetary Fund, which has imposed an economic austerity program as part of a $40 billion rescue package.

But Semari and villages like it around this vast nation of 200 million are at the heart of the crisis that threatens Indonesia's stability. And the people here know exactly why that is. "Let me tell you something: the problem is the price hikes," said Muhammad Jamil, a 37-year-old farmer. "Our income stays the same, but prices keep going up. If the prices come down, the problems will be solved. That's the solution. Just bring down the prices." On the other hand, he said, "If the prices keep going up, we'll protest in the streets."

It is already happening up and down the coast of eastern Java, as well as in several other places. In a dozen towns over the last two weeks, small riots have broken out as the prices of rice, cooking oil, kerosene an other staples have begun to rise.

Most analysts say this is just the beginning. Government price supports are only now starting to be removed from staple items as part of the IMF plan. Gasoline prices are scheduled to rise in two months. Bigger, broader and more damaging riots are feared as inflation intensifies and prices rise further.

Indonesia is already a restive nation, held together by force for the last 32 years under President Suharto. A pervasive government apparatus offers little outlet for grievances over corruption, abusive officials, unresponsive courts, disparities in wealth and wrenching cultural changes as cities grow and new factory towns devour fertile farmland.

"There is no rule of law," said Saukat Mifta, a 48-year-old businessman who lives in Kraton. "There is no way for people to channel their frustrations. The common people feel they are ignored by the law. The government does not respond to their complaints. So if there's a problem, they quickly become angry and they turn to violence. They don't try to understand. They just react."

And so, as life becomes harsher for the farmers and fishermen here, even unfounded rumors of price rises have been enough to spark riots. As they gathered around a visitor to shout their complaints, the villagers of Semari were a fount of exaggerated reports of rising rices. "Kerosene is 1,000 rupiah a liter, can you believe it?" they said. "Rice is up to 2,000. Cooking oil is 6,000. Everything is up! Some say sugar is 6,000 a kilo." A woman whispered, "Coconuts cost 200 each." These are impossible prices, said a farmer named Abdul Mukti. "Can you imagine, just 2,000 rupiah for working all day in the fields, and then prices like that? What if you have three kids to feed?" Before the Indonesian currency, the rupiah, began its steep fall last summer, 2,000 rupiah was worth about 80 cents. Today its value is closer to 20 cents.

So on Monday morning, when word spread that a prominent Kraton trader named Nuning had raised the price of a liter of kerosene to 1,000 rupiah from 350, the people of Semari were already seething. Kerosene is a key commodity, used by many Indonesians to fuel kitchen stoves. "We headed into town," said Jamil, the farmer. "Raising our knives!" shouted a young man. "No, no, no," the older men hushed him, glancing at their visitor. "No knives. No knives."

Men from another village brought two small potash bombs that are used illegally by fishermen to stun fish. One was a dud, the villagers said, but one exploded in front of the iron shutters of Mrs. Nuning's shop. (Like many Indonesians, she uses only one name.)

"The interesting thing is that Nuning hadn't raised her prices," said Saukat, whose mother-in-law owns a restaurant across the street from Mrs. Nuning's shop. "She wasn't even open that day. She hadn't been open for five days." Many Indonesian shops had not yet reopened following the Muslim holiday that ended the holy month of Ramadan.

But like so many of the conflicts that have produced Indonesia's crisis – from small-town riots to questions of governmental mismanagement – events here were driven as much by personal frictions and rivalries as by deep-rooted issues. "She's known as a rude person," Saukat said, voicing what seemed a common opinion in the nearby marketplace, where people described Mrs. Nuning as "hardheaded" and "troublesome." Mrs. Nuning was not available to defend her reputation; she was under military guard in a local hotel.

One local version of the Kraton riot is that a rival kerosene merchant had spread the rumor that Mrs. Nuning had raised her prices. On a broader stage, a prominent official in eastern Java has suggested that a rival politician is fomenting riots to discredit him.

Along with deepening poverty and spreading unemployment, the economic crisis has heightened frictions between political and economic rivals, between employers and their workers, between shopkeepers and their customers and between ethnic and religious groups. However the crisis plays out, everyone here seems to agree, Indonesia has become a more dangerous place.

As in many a town in many a country, the day's last word came in the Kraton market's barbershop, a tiny whitewashed room decorated with demure pinups of women wearing Muslim head scarves. "These price increases are incredible, incredible," said Dahlan, 65, a retired furniture finisher who spends his days relaxing on a small bench here. "It's not a game anymore." His friend Suwandi, a retired military officer, agreed. "The common people are shaken," he said. "They're confused. It's going to be noisy here. People will shout. You know how young men love to shout."