The Role of Agriculture in Indonesia Economic Development

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The Role of Agriculture in Indonesia Economic Development

Indonesia can be categorized as an agrarian nation, where the role of agriculture in Indonesia economy really significant. Agriculture sector in Indonesia has a role in: (a) providing job opportunity for the majority of labor force, (b) producing foods for the nation, (c) raw material producer for industrial sector, and (d) strengthening food security and rural development. The role of agriculture becomes more important when Indonesia in the middle of economic crisis.

Normally, agriculture activities are done in rural area, where most of Indonesian population stays. That is why agriculture development in Indonesia can not be separated from rural development at large. The development of agriculture sector will bring a large impact to the welfare of rural population. Because of most of population in Indonesia live in rural area, the condition of their welfare will largely effect national development.

Agriculture development in Indonesia is also related to the effort to reduce poverty and strengthening food security. Most of farmer in Indonesia own small piece of farming land. The average of land ownership in Indonesia is below 0.35 hectare. The consequence of small size of land ownership is most of people live below poverty line exist in rural area. The farmer with small size of land and landless farmers are those who also prone to experiencing food insecurity. The decreasing of income or the rising of food prices is sufficient to make farmers and their families facing a hardship to get access to enough food.

The rate of unemployment in Indonesia is relatively very high, it is more than 10 per cent. The growth of employment opportunity much lower then the increasing of labor force itself. The role of agriculture sector in absorbing the surge of unemployment in is relatively high. In 1980 the agriculture sector could provide employment to labor force around 54 per cent of the...
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