The Effect Of Agricultural Sector Credit On Rural Poor Populations Changes In Java Island
Abstract
The number of poor people on Java Island occupies the first position compared to other provinces in Indonesia. By region, the number of poor people in rural areas is always higher than in urban areas. The majority of the rural poor depend on their livelihoods in the agricultural sector. This study aims to analyze the effect of the variable agricultural sector investment credit, agricultural working capital credit, farmer exchange rates, and COVID-19 on changes in the number of poor people in rural areas on the island of Java. This research uses secondary data from five provinces in the period 2017–2022.The results of the study show that investment credit in the agricultural sector and working capital credit in the agricultural sector have no effect on changes in the number of poor people in rural areas. Meanwhile, the exchange rate of farmers has a significant negative effect on changes in the number of poor people in rural areas. And COVID-19 has had a significant positive effect on changes in the number of poor people in rural areas on Java Island in the 2017–2022 period. The implication that is recommended in this research is to evaluate and adjust policies related to the provision of investment credit and working capital credit in the agricultural sector. In addition, efforts are needed to maintain the stability of the Farmer's Exchange Rate (NTP) at a rational level. Coordination between the government, financial institutions, the private sector, and rural communities needs to be improved in formulating policies and programs that support FTT stability and poverty alleviation in rural areas. Interventions focused on rural communities, such as social assistance, skills training, and agricultural sector development, are also important to deal with the impact of COVID-19 and improve their livelihoods and incomes.
Keywords: Poverty, Credit, Agriculture, NTP, COVID-19
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