Agricultural Land Conversion, Land Economic Value, and Sustainable Agriculture: A Case Study in East Java, Indonesia
Abstract
:1. Introduction
2. Materials and Methods
2.1. Agricultural Land Conversion in Indonesia
2.2. Study Area
2.3. Data
2.4. Econometric Model and Estimation Procedures
3. Results
3.1. Land Economic Value
3.2. Factors Affecting Land Economic Value
4. Discussion
4.1. Land Economic Value and Agricultural Land Conversion
4.2. Factors Affecting Land Economic Value
4.3. Policy Implications
- The current incentive mechanism, contained in UU No. 41 Tahun 2009, should be focused on farmers in peri-urban areas, specifically those who choose to remain in farming, even at the expense of profit (peri-urban farmer), since the current incentive mechanism requires proactive and highly motivated farmers.
- There should be an effort to encourage farmers to cultivate crops that are suitable to the land characteristics. Cultivating high-value crops actually increases land value. However, land quality (fertility) will be degraded if the land is forced to produce crops that are basically unsuitable for its characteristics [68,69]. This is one of the major causes of land quality degradation. Since land fertility is proven to positively affect land value, both theoretically and empirically, uncontrolled land quality degradation will sacrifice the sustainability of agriculture itself. Thus, it is important to conduct a detailed analysis of land suitability in relation to cropping patterns, especially in rural areas. This should be the main agenda in the framework of increasing the agricultural land economic value in rural areas.
- The growing number of commercial farmers in rural areas should be supported by granting them access to timely information regarding market conditions and farm technology. Commercial farmers tend to be more responsive to new information and technology. Thus, improving their access to technology will further improve their farming productivity [70,71].
5. Conclusions
- The data used in this study came only from two villages representing peri-urban and rural areas, respectively, and they also had only one period of observation. The information gained will be useful by adding a spatial and temporal dimension to the data. Thus, we leave this endeavor to the future studies.
- The peri-urban land use studied in this study consisted only of housing. Although this is the major form of peri-urban land use in our study area, future studies will produce important results by incorporating other forms of peri-urban land-use.
- We have found a puzzling anomaly between food cropping in rural and peri-urban areas, especially with the output price being different. The information that we collected in this study is not adequate to explain this anomaly. Thus, we leave this endeavor for future research.
- Systematically identifying the characteristics of peri-urban farmers and thoroughly exploring what motivates them to remain in farming and retaining their farmland;
- Identifying the characteristics of commercial farmers in rural areas, and tracing how they acquire information regarding market conditions and technology that that they use in making farm decisions; and
- Conducting an agricultural land suitability analysis and measuring the economic benefits of cultivating crops that are suitable for the land characteristics.
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
References
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1 | Many house renters in the peri-urban area are college students who rent houses in groups to reduce the average rental per person. Other house renters are typically small families who prefer smaller to larger houses. |
2 | In this study, we do not systematically assess the impact of urbanization on agricultural activities in the peri-urban area. However, based on our observation, new housing developments degrade the quality of irrigation infrastructures. Moreover, the pollution from urban activities (especially household) lead to decreasing water quality. Furthermore, many farmers reported that it is difficult to find labor for their agricultural activities, due to the change in employment structure. |
Variable | Code | Unit | Full Sample | Kepanjen | Antirogo | |||
---|---|---|---|---|---|---|---|---|
Mean | S.D. | Min. | Max. | Mean | Mean | |||
Land area | L.area | m2 | 4005 | 2515 | 1000 | 10,000 | 4211 | 3800 |
Distance to irrigation | Irrigation | M | 1047 | 1681 | 0 | 5000 | 42 | 2053 |
Distance to nearest market | Market | M | 4250 | 1305 | 2000 | 8000 | 4080 | 4420 |
Distance to road | Road | M | 113 | 147 | 1 | 1000 | 123 | 104 |
Land tenure | Tenure | owner (1), other (0) | 0.88 | 0.32 | 0 | 1 | 1 | 0.76 |
Cropping pattern | Crop | mixed (1), food (0) | 0.33 | 0.47 | 0 | 1 | 0.26 | 0.40 |
Soil fertility | Fertility | fertile (1), less fertile (0) | 0.82 | 0.38 | 0 | 1 | 0.88 | 0.76 |
Location | Location | Peri-urban (1), rural (0) | 0.5 | 0.5 | 0 | 1 | 0 | 1 |
Observation | 100 | 50 | 50 |
Variable | Code | Unit | Full Sample | Kepanjen | Antirogo | |||
---|---|---|---|---|---|---|---|---|
Mean | S.D. | Min. | Max. | Mean | Mean | |||
Building area | B.area | m2 | 71 | 26 | 27 | 198 | 74 | 68 |
No. of room | Room | m | 3 | 1 | 2 | 8 | 3 | 3 |
Distance to road | Road | m | 117 | 170 | 1 | 1000 | 184 | 50 |
Distance to downtown | Downtown | m | 6135 | 1670 | 3500 | 10,000 | 6350 | 5920 |
Water availability | Water | sufficient(1), insufficient(0) | 0.95 | 0.26 | 0 | 1 | 1 | 0.94 |
Location | Location | Peri-urban (1), rural (0) | 0.5 | 0.5 | 0 | 1 | 1 | 0 |
Observation | 100 | 50 | 50 |
Land Use | Unit | Rural Area | Peri-Urban Area | Full Sample | ||||
---|---|---|---|---|---|---|---|---|
Mean | Min. | Max. | Mean | Min. | Max. | Mean | ||
Agriculture | Rp/m2/year | 6047 | 1600 | 19,504 | 4447 | −416 | 10,975 | 4997 |
Housing | Rp/m2/year | 5059 | 278 | 14,908 | 39,954 | 7917 | 142,188 | 22,312 |
Location | Cropping Pattern | Number of Farmers | Cropping Season (Rp/m2) | Yearly Average (Rp/m2) | ||
---|---|---|---|---|---|---|
1st | 2nd | 3rd | ||||
Rural | paddy, paddy, paddy | 7 | 2049 | 1825 | 1649 | 5477 |
paddy, paddy, maize | 22 | 1786 | 1711 | 1442 | 4893 | |
paddy, maize, maize | 5 | 2428 | 2068 | 1912 | 6336 | |
no crop, paddy, paddy | 1 | 0 | 1521 | 1455 | 2907 | |
no crop, paddy, maize | 2 | 0 | 1585 | 566 | 2111 | |
paddy, maize, chili | 4 | 1434 | 1196 | 715 | 3303 | |
paddy, maize, bitter melon | 2 | 2164 | 1637 | 7273 | 10,988 | |
paddy, bitter melon, bitter melon | 2 | 3288 | 4438 | 4438 | 12,072 | |
no crop, paddy, chili | 3 | 0 | 2932 | 2704 | 5603 | |
paddy, chili, chili | 1 | 1024 | 332 | 332 | 1600 | |
paddy, bitter melon, chili | 1 | 2445 | 6723 | 10,399 | 19,503 | |
Peri-urban | paddy, paddy, maize | 30 | 1421 | 1590 | 706 | 2738 |
paddy, paddy, tobacco | 20 | 1106 | 1336 | 4694 | 6777 |
Land Origin | Economic Value (Rp/m2/Year) | ||
---|---|---|---|
Mean | Minimum | Maximum | |
Converted agricultural land | 7917 | 7917 | 42,230 |
Housing | 45,063 | 45,063 | 142,188 |
Agricultural Land | Housing | ||
---|---|---|---|
Variables | Coefficients | Variables | Coefficients |
Intercept | 8890.691 *** | Intercept | 4858.626 ns |
L.area | −0.151 * | B.area | −108.330 ns |
Irrigation | −0.338 ** | Room | 3206.109 ** |
Market | −1.052 *** | Road | −0.166 ns |
Road | −4.145 *** | Downtown | −8.975 *** |
Tenure | 186.858 ns | Location | 83,696.221 *** |
Crop | 1950.186 *** | ||
Fertility | 987.133 * | ||
Location | −0.151 * | ||
R2 | 0.656 | R2 | 0.640 |
F test | 21.648 *** | F test | 33.450 *** |
Observation | 100 | Observation | 100 |
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Rondhi, M.; Pratiwi, P.A.; Handini, V.T.; Sunartomo, A.F.; Budiman, S.A. Agricultural Land Conversion, Land Economic Value, and Sustainable Agriculture: A Case Study in East Java, Indonesia. Land 2018, 7, 148. https://doi.org/10.3390/land7040148
Rondhi M, Pratiwi PA, Handini VT, Sunartomo AF, Budiman SA. Agricultural Land Conversion, Land Economic Value, and Sustainable Agriculture: A Case Study in East Java, Indonesia. Land. 2018; 7(4):148. https://doi.org/10.3390/land7040148
Chicago/Turabian StyleRondhi, Mohammad, Pravitasari Anjar Pratiwi, Vivi Trisna Handini, Aryo Fajar Sunartomo, and Subhan Arif Budiman. 2018. "Agricultural Land Conversion, Land Economic Value, and Sustainable Agriculture: A Case Study in East Java, Indonesia" Land 7, no. 4: 148. https://doi.org/10.3390/land7040148