Contribution of Rural Banks to Regional Economic Growth

Following the literature on the relationship between financial development, economic growth and the poverty rate, this present study empirically examined the links between rural bank development, economic growth, and the poverty rate at the sub-regional level in Indonesia. The contribution of this research is based on its utilisation of regional variation in rural bank development (over time) to explain the complex relationship between this development and both economic growth and the poverty rate. The first objective of this study was to address the causal relationship between rural bank development and either economic growth or the poverty rate. The second objective was to analyse whether central bank policies or regional government policies on rural banks have had an impact on the development of the banks in Indonesia, and particularly whether the policies have had an impact on the contribution of rural banks to regional economic growth and regional poverty rate reduction. Two methodologies were used in this study. The first methodology was cointegration tests and an error correction based causality test. The second methodology was two stage least squares. The findings of this study were: 1) Cointegration tests indicate that there is a long-run relationship between rural bank assets and regional GDP per capita, and between rural bank assets and the regional poverty rate; 2) DOLS and FMOLS estimations show that rural banks promote economic growth and reduce regional poverty; 3) There is no evidence that rural bank assets Granger-cause regional GDP per capita and the regional poverty rate. The direction of causality is the other way around, from regional GDP per capita to rural bank assets and from the regional poverty rate to rural bank assets; 4) Results of 2SLS estimation show that rural bank assets promote regional economic growth and reduce regional poverty; and 5) The 2SLS estimation also suggests that only one local regulation has a significant effect on the development of rural banks which is local regulation on the development of SMEs. Meanwhile, the national regulations positively and significantly affect rural bank assets, except for developed regions

Prediction of Peri-Urban Land Use in Sleman Regency and Its Suitability towards Spatial Planning

The development of Yogyakarta city as the growth center in the Yogyakarta urban area has resulted in significant physical changes on its peri-urban, especially in Sleman Regency. The peri-urban area is a transition zone between urban and rural features. This area often experiences dramatic changes in socio-economic as well as spatial structure conditions such as land conversion. The rate of land conversion in the peri-urban area of Sleman Regency happened mostly due to the need for housing, including the need for migrants. This land use dynamic needs to be understood to anticipate uncontrolled land use changes in the future, especially in peri-urban as it has been widely developed for housing in recent years. Therefore, this study seeks to simulate land use changes in the peri-urban area of Sleman Regency in 2041 using Land Change Modeler. The variables used in this study consisted of driving factors (distance to roads, distance to settlements, and population density) and limiting factors (distance to rivers, environmental physical conditions, and determination of protected areas). Based on the simulation results, there will be a significant increase in residential areas from agricultural areas. On the contrary, green areas (forest, bush, and open land) experience a decrease. Simulation of future land use and suitability is the first step for land use policy-making. By knowing future land use, this study can be beneficial for land use control policies for sustainable land use, especially in rapidly developed areas

Problematika Pengembangan Padi Organik di Sawangan Magelang serta Peluang Sertifikasi Internasional

Organic farming has been remarkably evolving in many areas of Indonesia for responding environmental issues and producing healthy foods. Organic rice is a type of organic farming product of a system which has been widely practiced including in Sawangan Village Magelang District as one of pioneering area on organic rice development in Central Java Province. This study is directed to analyze supporting factors, various problems faced on the development of organic rice and opportunity for getting international organic certification. A study has been done through household interview (30 farmers), indepth interview with key informants and Focus Group Discussion (FGD) at agricultural office of Magelang District. Data analysis used in this study are statistical descriptive and categorical qualitative. Results of the study show that: (1) performance of organic rice gradually getting better and productivity level has been getiing closer to conventional high external input rice farming, (2) supporting factorson improvement of organic rice include healthy rice production initiated through integrated pest management,transformative group leadership, supports from related stakeholders, high economic incentive, improvement of market networking, product certification, ICT application and favourable natural resource endowment, (3) Problems faced on the development of organic rice include variety of product quality among farmers, price variety and fluctuation, difficulty in organic seed access, mixing area of organic and anorganic rice farming, (4) Strategies for improving opportunity to get international organic sertification include innovation on product diversification, application of fresh product certification, modernization of machine for rice processing

The Role of Urban Farming in Improving Community Welfare and Urban Food Security: Case Study of Farmers Group of Giwangan Village, Yogyakarta City

In many developing countries, the process of urbanization goes hand in hand with increasing urban poverty, food insufficiency and malnutrition, as well as rising unemployment rates. These urban problems are also found in the city of Yogyakarta. Therefore, since 2018, the City Government of Yogyakarta has initiated urban farming activities as a manifestation of efforts to create independent food security by the community. The urban farming activity is carried out on a micro scale through the role of farmer groups as evidenced by the growing number of small-scale farmer groups, namely the village level. Previous studies on urban farming have focused on obtaining quantitative data so that an assessment of the environmental, economic and social impacts of these activities can be carried out. This study also has the same focus with specific objectives, namely: 1) identifying the socio-economic profile of urban farming actors in Giwangan Village, Yogyakarta City and 2) identifying the role of urban farming in efforts to improve community welfare and urban food security in Giwangan Village, Yogyakarta City. The results show that respondents were engaged in urban farming as a hobby/recreation (26.7 percent) and to increase income (26.7 percent). Most of respondents get income from the sale of urban farming of less than 1 million Rupiah per month. Most of respondents (83.3 percent) considered that their urban farming activity was successful because it was able to reduce family’s food expenditures.Keywords: City of Yogyakarta, Urban Farming, Food Security, Public Welfar

Farmer’s willingness to accept the sustainable zoning-based organic farming development plan: A lesson from Sleman District, Indonesia

Zoning-based organic farming has become increasingly attractive in Indonesia for producing healthy food, improving the quality of land and the environment, and increasing the welfare of farmers. The problem is that organic farming areas should be certified by a legal agency called the National Standardization Agency and the cost should be paid by farmers in those areas. Zoning allows the farmers to jointly manage farming areas, including payment of certification costs. However, the success of zoning-based organic farming implementation depends on farmers’ acceptability. This study aims to analyse perceptions and knowledge regarding zoning-based organic farming plans, measure the level of farmers’ willingness to accept (WTA) zoning-based organic farming plans and determine the effect of economic, ecological, and social support factors, as well as other factors towards WTA the zoning-based organic farming system. This study found that the majority of farmers perceive zoning-based organic farming as economically viable and ecologically and socially supported compared to conventional farming since most of the farmers have good knowledge regarding the importance of zoning. Although the farmers have long been experiencing conventional farming, the number of WTA farmers in zoning-based organic farming is very high. The study confirmed that the ecological aspect is the most influential in accepting zoning-based organic farming. Economic factors have a very strong influence on increasing farmers’ WTA zoning-based organic farming. This study also suggests that the implementation of zoning-based organic farming needs to be sustainably supported by the community