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Judul : Agrarian Transformation through Rural Savings and Investment
Abstrak :

Currently, the agricultural sector in Indonesia employs about 35 percent of the workforce, while the gross
domestic product (GDP) share of the sector is only around 14 percent. This indicates relatively low level
of farmers’ income compared with other sectors. One of the critical problems in conducting agrarian
transformation is scarcity in savings and investment in rural areas. This problem limits not only the
ability of the agricultural sector to grow optimally but also stops the improvement of non-farming and
off-farming activities in rural areas. This will only retard any growth in agricultural employment and
lead to poor accumulation in this sector. Therefore, studying agriculture/rural savings and investment
and its relation to support agrarian transformation is very important. This study included analysis of
factors affecting agricultural savings and investment. It utilized household data from three Indonesian
provinces, which have played a predominant role with respect to the agricultural sector. A regression
analysis found that farm-level investment is positively affected by the area of land operated and farm
income. Households with more non-agricultural income tend to have higher savings and productive
investment, which can potentially be used for financing non-farm and off-farm activities. Therefore,
there is the potential to provide jobs to members of the existing workforce who are currently working
below their capacity. As a result, agrarian transformation can occur. This study also suggested that the
government needs to provide incentives to farmers, as well as non-farmers, to invest more in the rural
Keywords: agrarian transformation, rural savings, rural investment, household data, regression analysis

Tahun : 2015 Media Publikasi : Jurnal Internasional
Kategori : Jurnal No/Vol/Tahun : 3 / 12 / 2015
PTN/S : Universitas Pakuan Program Studi : MANAJEMEN
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