Study On The Development Of Professional Farmer In Indonesia

The Asian continent will need more food than the current demand in the next decade.However,in the past decade,the phenomenon of farmers is due to the fact that many younger generations have not attracted be farmers,farmers have no successors,retired farmers have increased,education level and income have decreased,lack of mechanization,land fragmentation and farmland conversion have led to a decrease in the number of farmers.In this case,professional farmers are a possible solution because they are well-trained to operate modern technology,use inputs efficiently and create high productivity.Indonesia is also the most populous country in Southeast Asia,the fourth most populous country in the world,and one of the most important rice consumers.Indonesia should formulate policies to increase food production to overcome the severe challenges ahead.One strategy to solve these problems is to use modern agricultural production functions,such as capital and technology.Previous research on professional farmers has not been studied in accordance with the adopted policies and professional farmers in Indonesia have not yet been conceptualized.This research fills in the literature gaps caused by training type needs,agricultural credit and other variables,and evaluates the changes of endogenous causal variables by using the control function as the main procedure.To the best of our knowledge,this study is the first to use the Indonesian National Farmer Survey to determine the farmers behaviour after and before the enactment of Farmer Empowerment Law.This research made three contributions.First,it introduces the research on professional farmers in detail with the theory of production function,and adds some meaningful nuances to professional farmers,especially the farmers' empowerment policies in Indonesia.The study analysed the probability of using the farmer's age to become a professional farmer.Secondly,this dissertation examines the differences between professional farmers in dominant rice-producing provinces.Third,this study uses impact assessments to evaluate some policies and programs related to the empowerment of Indonesian farmers.The research goal of this dissertation is to develop professional farmers in Indonesia.More specifically,this research aims to determine the characteristics of professional farmers in Indonesia after the promulgation of the Farmer Protection and Empowerment Law.The first study investigated the impact of technology adoption on rice production behaviour.In the second study,I studied farmers and farming characteristics related to professional farmers and rice yield.The third study identified social and economic factors related to professional farmers.The fourth study evaluated the impact of programs based on legal purposes.This study uses the survey data of the National Farmers Group Survey(Patanas)conducted by the Indonesian Agricultural Social Economy and Policy Research Centre in2010 and 2016 as the main data,and continue collected survey data in 2019.Professional farmers in Indonesia have not been conceptualized before,so in this study,the investigation define professional farmers in Indonesia as farmers who are mainly engaged in agricultural work and have received training.The first goal is to evaluate a more comprehensive view of the dominant rice farmers on the determinants and barriers of production factors before and after the formulation of the Farmer Empowerment Law,and to use household-level data sets to address the potential endogeneity of covariates.This dissertation believes that because Indonesian land restricts the control of farm scale,there are problems with the expansion of arable land,and many Indonesian areas are peatlands.Rice farming technology increased agricultural production in 2010 and 2016,which means that technology is important to Indonesian farmers.The study treat technology as endogenous because the development of government plans may affect agricultural production and may affect farmers' income.So,this dissertation uses age and training programs as additional tools for technology.Our results show that farmers over the age of 60 are less likely to use modern technology.That is to say,farmers reduced their use of technology by 6% in 2010 and 18% in 2016.The training program items are statistically related to agricultural occupations.The second goal of the study is to study the impact of farmers' empowerment policies on the agricultural production factors and rice yields of professional farmers in Indonesia in 2010 and 2016.The Farmer Empowerment Law has a significant negative impact on farmland professional farmers,input costs and rice yield at the 1% level,which are 0.509,0.996 and 0.521 respectively.After the passage of the Farmer Empowerment Law,the issue of agricultural production factors and rice output emerged.The PSM-DID results are estimated to be significantly different from the previous results.In the previous stage,the farmland,input cost and rice yield of professional farmers were significantly positive.In addition,there is great pressure on the transfer of cultivated land and the distribution of input subsidies in the region.The Farmer Empowerment Law cannot solve these problems because the local government has the right to stipulate spatial planning,and some local government is not interested in developing the agricultural sector.The third goal of the study is to determine the socio-economic factors(formal education,homeownership,poverty,farmer membership,age,institutional training and financial knowledge)that affect Indonesian rice production farmers.Using two different methods(Logit and Probit),the results provided that homeownership,training material and financial knowledge had a positive impact on professional farmers in 2010 and 2016,while poverty and collateral both had a negative impact on professional farmers in both years.The farmer's age is over 60,indicating that strong negative and significant impacts will become the possibility of becoming a professional farmer in 2016.Due to deficiencies in agriculture,elderly farmers are less involved and are less likely to engage in agricultural activities.In addition,in order to facilitate access to credit,the government should review policies regarding collateral and financial knowledge(in terms of payment methods).Today,farmers rely on loans from middlemen(intermediaries)and merchants,and even in Indonesia there are food security and energy credits,this requirement is still tricky for farmers.Fourth,the study of the policy impact of the program is based on the purpose of the Farmer Empowerment Law.To this end,this dissertation analysed the policies that have been formulated and made recommendations to overcome implementing problem after enacted the farmer empowerment policy.The research focuses on the implementation of the Farmer Empowerment Law,and uses agricultural mechanization,wealth and poverty as indicators because these indicators are the purpose of the Farmer Empowerment Law.Our research shows that the participation of smallholder rice and small-scale farmer can significantly improve their agricultural machinery(31%)and reduce poverty(24%).Farmers who do not participate in the program will also benefit from the program;on the contrary,they get more benefits than those who participate in the program.Farmer Empowerment Law are not enough to ignore farmers' problem and create professional farmers in Indonesia.The finding showed the policy recommendations for solving the problem,i.e.: 1)strengthening the role of the extension worker.2)increasing the budget for research and development.3)maintaining the subsidy and credit facility.4)developing farmer-owned enterprises.5)modified the establishment of farmland and input management in the central government domain.6)omitted ego-sectoral interest;and 7)further cooperation with other countries.To revitalise Indonesian farmers as professional farmers,some key stakeholders need to share the tasks: the central government(especially the National Land Administration through land reform;the Ministry of Agriculture,the Ministry of Finance and the Ministry of Public Works),the local government and the Financial Services Agency.The Financial Service Authority has proposed a revision of Regulation 32/2018 on the maximum credit limit and,in particular,a modification of the local government legislation concerning the authority on fixed farmland for spatial planning.Despite the study's contribution,I acknowledge that this study had some limitations,focused only on paddy farmers and covered only the five largest paddy producer provinces.Further studies on secondary crops and other types of farming,such as horticulture,perennial crop,and livestock,are needed in the future on the impact of various types of farming on the professional farmers' livelihood.Future research should also pay more attention to food prices and current climate change issues.Furthermore,the number of plot features,including soil fertility and the watershed position,should be adopted by future studies.In the social aspect,gender of farmer and willingness continue farming are aspects that needed to consider for future research.Even though,the previous study has experienced impact farmer gender on agricultural production,however,this study omitted gender as a variable,caused in Indonesia,mostly farming done by the male,the woman involved in post-harvest and the marketing side.Similarly,as a professional farmer,I cannot examine in detail the behaviour of farmers affected,for example,ancestor influence.