Before the economic crisis of 1998, Indonesia had one of the best records for poverty reduction in the world. Poverty rates declined from around 40 percent in 1976 to 11 percent in 1996. Since then, there had been no reduction in poverty and it continues to be a serious problem in rural areas. Nearly 82 percent of the Indonesia’s poor people live in rural areas. The proportion of poor people in rural population is around 21 percent and has not shown a declining trend during the preceding decade. The poverty is more pronounced among farm-families. Out of 5.1 million rural poor households, nearly 82 percent are farmer households.
Though the share of agricultural sector in gross domestic product (GDP) has been declining over the decades and in 2007 was 13.4 percent, agricultural sector continues to be an important source of livelihood for a large section of Indonesia’s population. Out of a total of 54.2 million households in the country, as many as 46.5 percent are farmer households. The labor force engaged in agricultural sector is estimated as 41.2 million, which is nearly 41 percent of total labor force in the country. Obviously, the growth of agricultural sector is quite critical in reducing poverty in rural areas. The growth rate of agricultural GDP has decelerated during the recent 10 year period. During the period 1985 to 1995, the growth rate of agricultural GDP was only 3.3 percent, which during 1995-2005, decelerated to 2.3 percent per annum. But the more disconcerting aspect is the pattern of growth across different sub-sectors of agriculture. During 1996 to 2006, while the annual growth rate of palm oil, oil crops, fruits as a group, rubber, coffee and cocoa beans was very impressive, it was quite disappointing for major crops on which the livelihood of majority of farmers depend. The annual growth rate of rice production was 0.6 percent, of roots and tubers was 1.3 percent, of pulses was 0.8 percent and of sugarcane was 0.2 percent. In the case of potato, sweet potato, soybean, and vegetables as a group, the annual growth rate during 1996-2006 was negative, meaning thereby that their production has actually decreased during this period. These are the crops on which a large proportion of farmer households depend for their food security and livelihoods.
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Before the economic crisis of 1998, Indonesia had one of the best records for poverty reduction in the world. Poverty rates declined from around 40 percent in 1976 to 11 percent in 1996. Since then, there had been no reduction in poverty and it continues to be a serious problem in rural areas. Nearly 82 percent of the Indonesia’s poor people live in rural areas. The proportion of poor people in rural population is around 21 percent and has not shown a declining trend during the preceding decade. The poverty is more pronounced among farm-families. Out of 5.1 million rural poor households, nearly 82 percent are farmer households.
Though the share of agricultural sector in gross domestic product (GDP) has been declining over the decades and in 2007 was 13.4 percent, agricultural sector continues to be an important source of livelihood for a large section of Indonesia’s population. Out of a total of 54.2 million households in the country, as many as 46.5 percent are farmer households. The labor force engaged in agricultural sector is estimated as 41.2 million, which is nearly 41 percent of total labor force in the country. Obviously, the growth of agricultural sector is quite critical in reducing poverty in rural areas. The growth rate of agricultural GDP has decelerated during the recent 10 year period. During the period 1985 to 1995, the growth rate of agricultural GDP was only 3.3 percent, which during 1995-2005, decelerated to 2.3 percent per annum. But the more disconcerting aspect is the pattern of growth across different sub-sectors of agriculture. During 1996 to 2006, while the annual growth rate of palm oil, oil crops, fruits as a group, rubber, coffee and cocoa beans was very impressive, it was quite disappointing for major crops on which the livelihood of majority of farmers depend. The annual growth rate of rice production was 0.6 percent, of roots and tubers was 1.3 percent, of pulses was 0.8 percent and of sugarcane was 0.2 percent. In the case of potato, sweet potato, soybean, and vegetables as a group, the annual growth rate during 1996-2006 was negative, meaning thereby that their production has actually decreased during this period. These are the crops on which a large proportion of farmer households depend for their food security and livelihoods.
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