Stepping up from Subsistence to Commercial Intensive Farming to Enhance Welfare of Farmer Households in Indonesia

Asia & the Pacific Policy Studies, Volume 6, Issue 2, pages 246-265 (2019)

Crawford School Research Paper

20 Pages Posted: 12 Jun 2019

See all articles by Joko M

Joko M

Universitas Pancasakti

Date Written: May 11, 2019

Abstract

This article assesses the welfare impact of intensive chilli farming and determines the factors motivating farmers to engage in commercial farming. This study uses a structural equation model that measures the direct and indirect effects of explanatory variables on intensive chilli production and welfare. This study uses data of field surveys of randomly selected 220 farmers in three regions of Java. The results show that stepping up to intensive and profit‐oriented farming improved farmers' welfare. Internal and external factors, directly and indirectly, affected farmers' decision to devote more resources to commercial chilli farming. Farmers' knowledge, as well as access to credit, technology adoption, marketplace, and traders, played significant roles in improving rural welfare. The government needs to reform marketing system of horticultural products and establish market infrastructures to accommodate oversupply during peak season. Easy and flexible credit should be available and accessible to farmers, with technology applicable to such agriculture.

Keywords: chilli farming, external and internal factors, farming society, structural equation modelling (SEM), welfare impact

Suggested Citation

Mariyono, Joko, Stepping up from Subsistence to Commercial Intensive Farming to Enhance Welfare of Farmer Households in Indonesia (May 11, 2019). Asia & the Pacific Policy Studies, Volume 6, Issue 2, pages 246-265 (2019); Crawford School Research Paper . Available at SSRN: https://ssrn.com/abstract=3402786

Joko Mariyono (Contact Author)

Universitas Pancasakti ( email )

Tegal, 52131
Indonesia

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