2001 Fiscal Year Final Research Report Summary
The Rural Economy in West Java and Economic Reforms
| Project/Area Number |
11691081
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| Research Category |
Grant-in-Aid for Scientific Research (B)
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| Allocation Type | Single-year Grants |
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| Section | 海外学術 |
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| Research Field |
Agro-economics
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| Research Institution | Kobe University |
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Principal Investigator |
HONDAI Susumi Kobe University, Graduate School of International Cooperation Studies, Professor, 国際協力研究科, 教授 (70138569)
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| Co-Investigator(Kenkyū-buntansha) |
MATSUNAGA Nobuaki Kobe University, Graduate School of International Cooperation Studies, Professor, 国際協力研究科, 教授 (80127399)
TAKAHASHI Nobumasa Kobe University, School of Science and Technology, Professor, 自然科学研究科, 教授 (00294249)
SHINTANI Masahiko Seinan Gakuin University, Faculty of Economics, Professor, 経済学部, 教授 (70069706)
TAKADA Osamu Kobe University, Faculty of Agriculture, Assistant Professor, 農学部, 助教授 (90171446)
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| Project Period (FY) |
1999 – 2001
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| Keywords | Sukabumi, West Java / Surplus labor in the agricultural sector / Rice production expansion plan / Capital productivity and efficiency in firms / Small-scale firms and foreign firms / Financial sources for the small firms / Mutual financing among small firms / 小規模企業間金融 |
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| Research Abstract |
Indonesia non-agricultural sector absorbed a large number of labor force from the rural areas during the 1950-85 period. But labor forces grew faster than employment opportunities, the agricultural sector had to absorb labor forces which could not find employment in the non-agricultural sectors. Although their employment opportunities had expanded rapidly due to foreign direct investment since 1985 and the labor force share in the agricultural sector started to decline, it employed still over 40 percent of labor forces in 1997.
During and after the economic crisis, Indonesian government removed the price support programs and various subsidies to the agricultural sector. But their effects on agricultural sector was not so serious compared with other sectors because the terms of trade turned in favor of the agricultural sector somehow. At the same time, some labor forces lost employment opportunities in urban areas migrated to rural areas and they were employed in the agriculture increase
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d/ This indicates that labor forces are still moving between the agricultural and non-agricultural sectors significantly. On the other hand, agricultural production associations and other rural organizations have not been working well anymore because of introduction of new technology and new production arrangements.
When Indonesian manufacturing sector is compared with that in other countries ones, employment expansion of the former small-scale enterprises has been slower. In Indonesian case, capital productivity of the small-scales is lower than that of the large-scales. In other countries' case, it is higher at the small-scales and lower at the large-scales. The theory shows that the other countries' pattern is appropriate one. The major factor created Indonesian pattern is as follows. The production level is low at the small-scale enterprises. As the result, their assets are not fully utilized and then their capital productivity goes down. This fact is related to lack of subcontracting arrangements between the small- and large-scale enterprises and division of labor among them. Because of the lower levels of both production arrangements, the small-scale enterprises cannot fully utilize their capacity and cannot attain a higher efficiency level in their production activities. To solve this problem, the sector has to develop appropriate systems for sharing the works between small- and large-scale enterprises and among the small-scale enterprises. Less
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