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Impact of Surplus Labor Existence on Land Lease Market in Rural Central Java

Author

Listed:
  • Ernoiz Antriyandarti

    (Faculty of Agriculture, Universitas Sebelas Maret, Indonesia. Author-2-Name: Susi Wuri Ani Author-2-Workplace-Name: Faculty of Agriculture, Universitas Sebelas Maret, Indonesia.)

Abstract

"Objective – The Indonesian rice sector seems to lose global competitiveness, and the government intervenes in the market to achieve food self-sufficiency. Particularly, in the main rice producing areas of Central Java, the rice sector does not have a comparative and competitive advantage due to small farm size. Then, we need to investigate the reasons why the farm sizes of rice producers are still small. Methodology/Technique – We hypothesize that the existence of surplus labor in rural areas restrains farm size enlargement. Therefore, we need to examine the existence of surplus labor in study area. By using the empirical model of the Cobb Douglas production function, we test the hypothesis of surplus labor. The estimation result shows that there is a surplus of labor in the study area. Findings – In addition, we examine the impact of surplus labor on land lease market in rural area. This study proves empirically that there is surplus labor in rural areas; therefore, farmers have difficulty finding job opportunities in sectors other than farming. In such a case, they prefer to cultivate rather than lease their land. Novelty – This result implies that the existence of surplus labor restricts the number of land lease contract. As a result, the land lease supply in the land lease market has become very limited. Thus, the existence of surplus labor in rural areas would be a constraint of farm size enlargement. This is the first study which explores the relationship between surplus labor and land lease market in the main rice producer area in Central Java."

Suggested Citation

  • Ernoiz Antriyandarti, 2017. "Impact of Surplus Labor Existence on Land Lease Market in Rural Central Java," GATR Journals jber133, Global Academy of Training and Research (GATR) Enterprise.
  • Handle: RePEc:gtr:gatrjs:jber133
    as

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    References listed on IDEAS

    as
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    4. de Janvry, Alain & Sadoulet, Elisabeth & Zhu, Nong, 2005. "The Role of Non-Farm Incomes in Reducing Rural Poverty and Inequality in China," CUDARE Working Papers 25043, University of California, Berkeley, Department of Agricultural and Resource Economics.
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    More about this item

    Keywords

    Impact; Existence; Surplus Labour; Land Lease Market; Farm Size Enlargement.;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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