| Summary: | This study aims to examine the impact of government projects in the
agriculture sector for economic development in Indonesia in the terms of induced
output, induced income and induced employment by using the input output model.
It will focus on the three main agricultural commodities namely rice, maize, and
soybean. The government projects have the purpose of improving household
income and achieving self-sufficiency programs in rice, maize and soybean
production.
There are three types of subsidy in this study called seed subsidy,
fertilizers and pesticides subsidy and machines and tools subsidy. The first
objective is to examine the impacts from government projects in the form of the
agriculture inputs subsidy. By using Input Output Analysis, this part reveals that
the seed subsidy gives the highest induced output, induced income and induced
employment among other types of subsidy. Seed subsidy seems have the best
impact for stimulating economic activities, it especially stimulates agriculture
sectors and agriculture-related industries and service sectors and contributes more
to improvement of agriculture labor income.
Because of the difference in impact of subsidy types and limitation of national
budget, in order to optimize the effect of government expenditure on agriculture
products self-sufficiency program, it is important to find what kind of optimal
expenditure will support this national purpose best.
In the second part, this study reveals the optimal solutions of the amount of
seed subsidy and fertilizers and pesticides subsidy because these subsidies are
granted in order to give full back up for certain production expectation. By using
Linear Programming, it can be found that the optimal budget for seed subsidy and
fertilizers and pesticides subsidy are less than the original government budget.
The optimized results indicate that the government can save the
expenditure while pursuing the self-sufficiency program. It gives a better decision
in distributing qualified agriculture inputs subsidy by considering the demand of
each sub-type of subsidy. In order to understand the impacts of the optimized
budget of each type of subsidy in the economy, Input Output analysis will be used
in the third part of this subsidy.Examining the impacts of optimal amount of government expenditure is
important in order to elaborate how every type of subsidy influence induced
output, induced income and induced employment in economy. The change of the
composition of final demand caused the change of induced effects and also the
sectors generated by it. It might depend on the inter linkages among sectors in the
economic structure. The higher the sector role in economic activities related to
final demand, the better the sector share. The type of subsidy gives a characteristic
influence to sectors which generated by. The results show that, at the optimal
government expenditure, seed subsidy has the highest output ratio, income ratio
and employment ratio.
|
|---|