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Agricultural Production and its Implications on Economic Growth and Poverty Reduction

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  • Darwati Susilastuti

Abstract

The objective of the study was to analyze the magnitude of factors affecting Agricultural Production and its implications on Gross Regional Production (GRP) Growth and Poverty Reduction.Panel data from 6 provinces of center production of paddy of Indonesia for 10 years (2007-2016) were analyzed by Path Analysis method. Productivity of Agricultural Land and Wetland Area has a very strong relationship with Agricultural Production. The productivity of Agricultural Land is the dominant factor and has the significant effect on Agricultural Production.Agricultural Production has no significant effect on GRP growth rate. Agricultural Production has not been able to reduce poverty. GRP growth rate has the significant effect and is the dominant factor for poverty reduction.Based on the finding of the research, government policy programs for poverty reduction in rural areas can be done by improving agricultural cultivation technology, the extent of wetland area, increasing of agriculture-based industries and the provision of poverty reduction programs budget.

Suggested Citation

  • Darwati Susilastuti, 2018. "Agricultural Production and its Implications on Economic Growth and Poverty Reduction," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 309-320.
  • Handle: RePEc:ers:journl:v:xx:y:2017:i:3b:p:309-320
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    File URL: https://www.ersj.eu/dmdocuments/2018_XXI_1_25.pdf
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    References listed on IDEAS

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    1. Bas van Leeuwen & Peter Foldvari, 2012. "The development of inequality and poverty in Indonesia, 1932-1999," Working Papers 0026, Utrecht University, Centre for Global Economic History.
    2. Sumarto, Sudarno & Suryahadi, Asep, 2004. "The Role of Agricultural Growth in Poverty Reduction in Indonesia," MPRA Paper 60724, University Library of Munich, Germany.
    3. Minh Quang Dao, 2009. "Poverty, income distribution, and agriculture in developing countries," Journal of Economic Studies, Emerald Group Publishing, vol. 36(2), pages 168-183, May.
    4. Adams, Richard Jr., 2004. "Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty," World Development, Elsevier, vol. 32(12), pages 1989-2014, December.
    5. Isaac B. Oluwatayo & Ayodeji O. Ojo, 2016. "Is Africa’s dependence on agriculture the cause of poverty in the continent? An empirical review," Journal of Developing Areas, Tennessee State University, College of Business, vol. 50(1), pages 93-102, January-M.
    6. Dalila Cervantes-Godoy & Joe Dewbre, 2010. "Economic Importance of Agriculture for Poverty Reduction," OECD Food, Agriculture and Fisheries Papers 23, OECD Publishing.
    7. Diao, Xinshen & Hazell, Peter & Thurlow, James, 2010. "The Role of Agriculture in African Development," World Development, Elsevier, vol. 38(10), pages 1375-1383, October.
    8. Derek Byerlee & Alain de Janvry & Elisabeth Sadoulet, 2009. "Agriculture for Development: Toward a New Paradigm," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 15-31, September.
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    Keywords

    Agricultural; GRP; Poverty.;

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