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Download by: [Universitas Maritim Raja Ali Haji] Date: 17 January 2016, At: 23:49
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Agricultural Transformation and the Escape from
the Middle-Income-Country Trap: Challenges
Facing Small Farmers in Indonesia in a Time of
Green Restructuring
Shinyoung Jeon
To cite this article: Shinyoung Jeon (2013) Agricultural Transformation and the Escape
from the Middle-Income-Country Trap: Challenges Facing Small Farmers in Indonesia in a Time of Green Restructuring, Bulletin of Indonesian Economic Studies, 49:3, 383-384, DOI: 10.1080/00074918.2013.850636
To link to this article: http://dx.doi.org/10.1080/00074918.2013.850636
Published online: 05 Dec 2013.
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Abstracts of doctoral theses on the Indonesian economy 383
At the organisational level, in the experience of one municipal government (as a case study), the internalisation of accrual accounting was motivated primarily by the presence of legal enforcement. Beyond this, the process and outcomes of
the institutionalisation of accrual accounting contradict the intended beneits; the
lack of skills and experience in using accrual accounting has increased the
munici-pality’s accounting costs, and its oficials have yet to use accrual-based account -ing for real decision mak-ing.
In addition, the power and old habits of local actors (in this case study, of
sen-ior municipal oficials) have made the adoption of accrual accounting the subject
of corruption. In this vein, the technical capacity, power and old habits of local actors affect the extent to which a new accounting system can be internalised. The process and outcomes of this institutionalisation are shaped not only by pressures from external factors but also by the activities, processes and routines of actors within organisations.
One of the implications of these indings for policymaking is that Indonesia’s
central government needs to be aware of the capacity of local governments in implementing policies and programs. The adoption of a business-style account-ing system in the public sector may be costly and act against its promoted purposes, while a lack of competencies may exacerbate frustration within organi-sations, fuelling active resistance and hindering implementation. Further research could address the relationship between capability building and the proximity of
educational institutions. The inluence of culture, such as a common practice of
bribery, should also be considered. The thesis also contributes to the public-sector accounting literature by reducing the gap between what is known and unknown about rarely investigated governmental accounting practices in one of Asia’s emerging economies.
© 2013 Harun Harun
http://dx.doi.org/10.1080/00074918.2013.850637
Agricultural Transformation and the Escape from the Middle-Income-Country Trap: Challenges Facing Small Farmers in
Indonesia in a Time of Green Restructuring Shinyoung Jeon (shinyoung.jeon@graduateinstitute.ch)
Accepted 2013, Graduate Institute of International and Development Studies, Geneva
This dissertation argues that one of the main causes of stagnating growth in some middle-income economies is inadequate agricultural transformation. When a country attempts to accelerate its economic growth, it tends to priori-tise industrial development over agricultural development – the former is more straightforward, rapid and visible than the latter. However, stunted growth of rural agriculture will eventually weigh down sustained and balanced growth of the entire economy. Agriculture, when disregarded, results in an unsustainable expansion of the informal sector, without real growth of agricultural
productiv-ity and eficiency or a constructive transition to formal non-agriculture sectors.
384 Abstracts of doctoral theses on the Indonesian economy
Without integrating agriculture into formulas of sustained economic growth, a income country (MIC) will have no way of breaking out of the middle-income trap (MIT).
The dissertation therefore discusses the need to create conditions for an agricultural transformation in MICs – especially by paying attention to small, resource-poor subsistence farmers – and the role this agricultural transforma-tion plays in helping MICs escape the MIT. The theoretical foundatransforma-tion examines
why agricultural transformation in MICs is so dificult, through a review of the turning points identiied by, respectively, Arthur Lewis, Simon Kuznets and Peter
Timmer, expanding their arguments into the realm of the MIT and its core prob-lem: agricultural transformation. Building upon this foundation, the empirical structure describes a MIC case study – Indonesia, the third largest MIC and the fourth most populous country in the world – by exploring (a) the Indonesian agricultural economy and its linkages, using various macro-economic data at the national level from sources such as Statistics Indonesia, the UN’s Food and Agri-culture Organization, and the World Bank, and (b) Indonesian farm households, using primary data collected through a self-administered sample survey focused on rice growers at the local level.
Indonesia is facing a labour transfer from agriculture to an informal services sector with low productivity: the capital-intensive manufacturing sector does not
absorb suficient labour from rural agricultural areas, while the formal and pro -ductive services sector has high entry requirements – thus the labour productiv-ity gap widens between agriculture and services, and industry. Other issues in
Indonesia include dwindling investments in agriculture; ineficient agricultural
subsidies; and a lack of responses to emerging environmental constraints, interna-tional norms and changing demand. These transformainterna-tional pressures are borne by the poor, who rely on agriculture and make up the majority of the population
in Indonesia. More speciically, with decreasing farm sizes and shrinking beneits
from rice farming, combined with unsustainable farming practices, small farmers are experiencing diseconomies of scale, food insecurity and a lack of productive
employment opportunities. These pressures may be ampliied or attenuated in
this time of green restructuring.
Characteristics of the Indonesian example may present differently in MICs with different endowments (such as land, labour and agricultural resources) and different levels of economic performance. More comprehensive research on MICs will require the development of new measurements to better gauge the extended agriculture GDP of contemporary MICs, in addition to addressing the paucity of data on small farms. Policy-wise, the economic viability and environmental sus-tainability of small farms in MICs should be improved through more appropriate and targeted institutional mechanisms, including better adoption of existing
agri-cultural technologies and better farm connectivity to market beneits. In addition, there will be a need to rethink rice self-suficiency policies in a time of decreas -ing rice consumption and chang-ing diets. All of these efforts will be required to
achieve commercialisation, diversiication and specialisation, both within and
outside of the agriculture sector, with greater productivity. This will set the stage for escaping the MIT.
© 2013 Shinyoung Jeon
http://dx.doi.org/10.1080/00074918.2013.850636
