A new decade for social changes

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A new decade

for social changes

ISSN 2668-7798

Vol. 36, 2022

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Poverty alleviation and inequality of rural economics in Indonesia

Ilham¹, Abd. Kadir Arno², Hamdani Thaha³

1 2Ekonomi Islam, Institut Agama Islam Negeri (IAIN) Palopo, Sulawesi Selatan,

3Bimbingan Komseling Islam, Institut Agama Islam Negeri (IAIN) Palopo, Sulawesi Selatan

[email protected] [email protected] [email protected]

Abstract. This article aims to provide an overview of poverty alleviation and economic inequality in rural areas in Indonesia. To provide this description, the analysis building in the article will attempt to articulate some of the themes of poverty alleviation programs by data reduction, triangulation of the results of the article and then a presentation of data in the form of narrative texts. The conclusion from the findings of this article is that the program that has been carried out has reduced the amount of poverty nationally quantitatively. However, it should be noted that in poverty alleviation programs don't just prioritize quantitative measures in terms of ithe inumber iof ipoor ipeople, because ithe qualitative phenomena iof ipoverty ithat occur in ithe field are not explored. Therefore a qualitative (subjective) approach is needed to complete and explore non-economic variables that influence poverty assessments.

Keywords. Hope Family Program, Non-Cash Food Aid, Poverty Alleviation, Prosperous Rice, Rural Areas

1. Introduction

In itoday's iworld, poverty iand iinequality continue to occur creating a very real difference ibetween irich iand ipoor igrowing ion ia iglobal iand inational iscale iin ivarious icountries. iTherefore (Anriquez and Stamoulis, 2007) argued that the ichallenges iof ipoverty, iinequality iand ifood isecurity globally must ibe i"won ior ilost iin irural iareas iof ideveloping icountries. Because poverty is a conse-quence experienced iby ithe ipoor, hunger iand ilow income in the regions rural in low-income countries. The above statement is reasonable because it is estimated that 1,2 billion poor ipeople ilive ion i$ i1.25 ior iless ievery iday and 75% of them fall into extreme global poverty and 870 thousand people are starving every day (UN, 2013). Likewise (FAO, 2014) that 805, thousand poor people have an impact on their food security.

Rafallion, (2001) argues that in making policies to combat poverty, we must pay attention to the impacts felt by the poor, these policies must not ignore the diversity of average impacts. This diversity is an important clue for the government regarding what needs to be done in making poverty alleviation policies and promoting economic growth.

The term poverty does not have the right idefinition. iAccording to (Laca, 2011) poverty iis ioften iassociated iwith ithe iconcept iof iinequality, ibut ithese iare inot iidentical iconcepts, even though ithey iare irelated. One of ithe causes of poverty is income inequality between regions and very high income per capita. (Jaka Sumanta, 2015) suggested that poverty is a ISSN: 2668-7798 www.techniumscience.com

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causal relationship in the sense that the occurrence of high poverty levels is caused by low per capita income due to low levels of investment. The low level of investment per capita is due to the low domestic demand per capita, also due to high poverty rates and so on.

On another occasion (Arno et al., 2019) argued that not always high economic growth would reduce poverty, it could instead give birth to a paradox, which rapid economic development at this time could experience a trickle-up effect the result would cause inequality where income was not enjoyed evenly but only a handful of rich people.

As noted iabove, ipoverty iis ioften iassociated iwith iinequality. iProduction iand idistribution imechanisms iin ithe imarket ieconomy i(low ilabor iproductivity, iunequal iaccess ito imaterial iresources, unbalanced market ishare iof iproduction idistribution, which ileads ito ithe imarginali-zation iof icertain igroups in the ipopulation) inot ionly produce wealth ibut ialso ipoverty, iwhich iis an iextreme expression iof isocial inequality (ie bipolarity of wealth and poverty.

Therefore defining poverty by using a single definition will bias other indicators related to poverty. If explored thoroughly, other factors may have a significant impact on a person's poverty. Poverty has many dimensions not only related to one's material and income but includes other aspects, including non-material namely imental istress, ifeelings iof ivulnerability ito iexternal ievents, ia isense iof ihelplessness (Michalek, 2000)

The problem of poverty occurs especially in rural areas is not a trivial problem, and should also be considered by the government not only the concentration of poverty alleviation iin iurban iareas ibut poverty ialso often occurs iin irural iareas, this does not mean that the right of people in rural areas to be considered has not been given government.

Since the 1950s rural issues have been included iin idevelopment (Jerve, 2001) and iduring ithe i1970s iand i1980s, it gave ia istrong iemphasis ion rural development. At present, the rural problem reappears as a priority area for international development policy.

Development problems, especially in urban-rural areas, have resulted in inequality which iis ione iof ithe main ithreats ito igrowth iand isustainable idevelopment iin developing countries.

The above also happened in Indonesia, about i21.4 ipercent iof iIndonesia's ipopulation icurrently living iin iabsolute ipoverty and 53.8 percent living in relative poverty (Pekerti, 2020). iAbsolute ipoverty ias idefined iby ithe UN is iThese ipeople do not have iaccess ito iat ileast itwo iof ithe iIndicators iof iPoverty iand iHunger; imedical icare iduring iserious iillness iand ipregnancy, iclean iand iadequate ishelter, ieducation, icommuni-cation, iand isafe idrinking iwater. While the relative poverty of people who can provide for these important needs, but if it happens constantly irisks islipping ibelow ithe ipoverty iline.

Poverty iin iIndonesia is focused in rural areas, with around 25.14 imillion ipeople ior iaround 9.82% of ithe itotal ipopulation iof iIndonesia iliving ibelow ithe ipoverty iline ias idefined iby iStatistics iIndonesia. iAs ithe iWorld iBank inotes, ithree-quarters iof ithe iworld's ipoor iare ifarmers iin irural iareas. iThis istatistic ireflects ithree iout iof ifive iIndonesians, iwho ilive iin irural iareas iwhere iagriculture iis ithe imain ioccupation. iMany ipeople itend ito ismall iareas iof itheir iland ior itheir ineighbors, iable ito iachieve ifood iself-sufficiency idue ito ilack iof iagricultural iknowledge iand iproperty irights. (Pekerti, 2020).

Seeing the above phenomenon so that the iGovernment iof iIndonesia cooperates with ithe iworld ibank to alleviate poverty based on collaborative results ifrom iresearch ion ipoverty iand ipoverty ialleviation icovering imany ifields, isuch ias ipoverty itrends, isocial iassistance, isocial isecurity, icommunity-based iprograms, iand imore ijob icreation imore iand ibetter.

The icollection iof studies iserves ias ithe ibasis ifor the World Bank to provide policy recommen-dations ito ithe iGovernment iof iIndonesia. iThe iWorld iBank ialso iprovides itechnical isupport ito iimplement igovernment iprograms. iFor iexample, ithe iPNPM iSupport iFacility iprovides ianalytical iand iimplementation isupport ifor ithe iNational Community iEmpowerment iProgram.

ISSN: 2668-7798 www.techniumscience.com

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Various iattempts ihave ibeen imade iby ithe iGovernment iof Indonesia to reduce poverty through various programs to tackle poverty and have shown tangible results in the form of decreasing the percentage of poor people. Based on the official News iof ithe iCentral iBureau iof iStatistics ithe number iof ipoor ipeople iin iIndonesia iin iMarch i2019 ireached 25.14 imillion ipeople ior iabout 9.82% iof ithe itotal ipopulation. The number is reduced by 530 thousand people compared to the position in September last year and shrinking 805 thousand compared to the position in March last year. This official news further explained that ithe ipercentage iof ipoor ipeople iin iurban iareas iin iSeptember i2018 iwas 6.89 percent, down to 6.69 percent in March 2019. Meanwhile, the ipercentage iof ipoor ipeople iin rural iareas iin iSeptember 2018 was 13.10 percent, down to 12.85 percent in March 2019. Compared to September 2018, ithe inumber iof ipoor ipeople iin iMarch i2019 iin iurban areas idecreased iby i136.5 ithousand ipeople i(from i10,13 imillion iin iSeptember i2018 to 9.99 million in March 2019). Meanwhile, rural areas fell by 393.4 thousand people (from 15.54 million people in September 2018 to 15.15. (Central Statistics Agency, 2019) million people in March 2019).

Poverty alleviation programs and activities currently being implemented by the Government include: (1) iFamily iHope iProgram i(PKH), (2) Raskin Program (now Rastra / Prosperous Rice) is a food subsidy program (rice) for low-income people; and (3) iJoint iBusiness iGroup iProgram i(KUBE) iis ia igroup iof icitizens ior isocial fostered ifamilies iformed iand fostered through the Social Welfare Program to carry out ibusiness iin ia ispirit iof itogetherness ias ia imeans ito iimprove ithe ilevel iof isocial iwelfare (Ernada and Gaol, 2015)

This article aims to identify poverty alleviation programs and income inequality in rural areas globally in Indonesia and see the impact iof ipoverty ialleviation iprograms ithat ihave ibeen icarried iout

2. Method

This article uses a qualitative research approach, building analysis in the article will attempt to articulate some of the themes of poverty alleviation programs using data reduction, triangulation of the results of the article and then the presentation of data in the form of narrative texts. The idata iused iin ithis istudy iare secondary in the form of literature, iarticles iand research journals that have been carried out with themes related to rural development and related to poverty alleviation in rural areas.

3. Literature Review

IFAD, (2001) writes ithat ithe imajority iof ithe iworld's ipoor ilive iin irural iareas iand i1.2 ibillion ipeople are living in poverty who survive on less than one dollar a day, which is not enough to cover their food needs.

Ravallion et al., (2007) suggested that three-quarters of 75 percent of poverty still grows in rural areas if it is based on an international poverty line whose valuation is based on the real income that is constant iin iurban iand irural iareas iin a country. Ravalion also iadded that some countries indirectly define the poor as identical to rural areas, which is caused by one of the characteristics is the decline in the agricultural market share where the main activities of the rural economy tend to be agriculture. The same was stated by (Anriquez and Stamoulis, 2007) that under certain conditions, especially in developing countries, iagriculture iis istill ialways ithe istarting ipoint ifor irural idevelopment.

Hermanto, (2017) concluded in a journal that over the past two decades, poverty in Indonesia has experienced a marked decline. Although poverty in rural areas has also experienced a significant decline, data shows that poverty is still concentrated in rural areas.

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The relatively high Poverty Depth Index and Poverty Severity Index iin irural iareas indicates that ithe iincome iof ithe ipoor iis ilower iand imore iunequal compared to the urban poor.

Díaz, (2010) suggested that the level of education of a person from the poor group will get more opportunities from each additional level of education than those who did not get an education in the poor group caused by income distribution thus suggesting that there are certain factors needed that can increase income-poor people like the quality of social networks so they have the opportunity to receive an education.

Mihaela Mihai, Emilia Titan, (2015) suggested that education is one form of poverty alleviation that can be done because basically, ipeople iwho ilive iin ipoverty iare iaware iof ithe ifact ithat isending itheir ichildren ito ischool igives ithem iopportunities ithey idon't ihave to get out from the poverty trap. However, the fact that there is a lack of advanced education in rural areas results in the majority of rural communities only having an elementary school education. The lack of highly educated people encourages increased unemployment which then leads to poverty.

Likewise, (Silva-Laya et al., 2019) argued that to overcome poverty iand ieducation irequires imultisectoral ipolicies, coordination between other social actors to ensure the condition iof ieducability ifor ipoor ifamilies, iand iat ithe isame itime, it is needed ithe iprogress of ischool iinstitutions ithat meet ithe iright ito ilearn ito iexpand ithe icapabilities iof ithe ipoor.

4. Result and Discussion Poverty Alleviation

Kartasasmita, (1996) states that poverty reduction policies can be stated in three policy directions. First, indirect policies directed at creating conditions that guarantee the continuity of every effort to reduce poverty; second, direct policies aimed at low-income groups; and third, specific policies intended to prepare the poor themselves and the apparatus directly responsible for the smooth running of the program, while simultaneously spurring and expanding poverty reduction efforts.

Based on ithe i2015-2019 iNational iMedium-Term iDevelopment iPlan i(RPJMN), ithe poverty reduction strategy rests on three pillars, namely: icomprehensive isocial iprotection, iimpro-vement iof ibasic iservices, iand isus-tainable ilivelihoods. The government has organized various social protection and poverty reduction programs. As stated, in addition to KIS and KIP, other welfare programs have also been carried out, isuch ias ithe iFamily iHope iProgram i(PKH), ithe Subsidized iRice iProgram ifor iPoor iFamilies (Raskin) which later turned into Prosperous Rice (Rastra), and in 2017 it was again transformed into Non-Cash Food Assistance, Joint Business Groups (KUBE), and others, in addition to social protection programs organized by local governments, such as the Regional Health Insurance (Jamkesda).

Besides, programs that are nuanced with social protection and poverty reduction-by providing productive economic business assistance, education costs, and health costs for disadvantaged families, are also carried out by religious institutions (Islam) for example, through the National Amil Zakat Agency (BAZNAS), the Institute of Zakat Infaq and Sadaqah Muhammadiyah (Lazismu) and others organized by various other religious institutions, Society and Business World (Muhtar, 2017).

The programs carried out in the effort to reduce poverty have not been able to have a big impact so that until now the goals of national development related to the problem of equity and improving people's welfare are still a prolonged problem. Therefore, in the context iof ipoverty ialleviation iprograms currently being implemented iby ithe iGovernment include:

Family Hope Program (PKH)

The latest legal umbrella for ithe iFamily iof iHope iProgram i(PKH) is Social Ministerial Regulation No. 1 of 2018 concerning the Family of iHope iProgram iwhich iis ia ISSN: 2668-7798 www.techniumscience.com

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ipoverty ialleviation iprogram. The iFamily iof Hope Program (PKH) provides icash iassistance ito iVery iPoor iHouseholds (RSTM) if they imeet ithe irequirements irelated ito iefforts ito iimprove ithe iquality iof ilife iin ieducation iand ihealth. Similar programs have been imple-mented and have been quite successful in several countries known as iCondi-tional iCash iTransfers i(CCT) ior icondi-tional icash itransfers.

The main objective of iPKH iis ito ireduce ipoverty iand iimprove ithe iquality iof ihuman iresources, iespecially in poor communities. The ipurpose is at ithe same time as ian ieffort ito iaccelerate ithe iachievement iof iMDGs targets. In its implementation, PKH has general objecttives and specific objectives.

The general objective is to reduce numbers and ibreak ithe ipoverty ichain, iimprove ithe iquality iof ihuman iresources, and change the ibehavior of RTSM which is relatively lacking in welfare. Specifically, the objectives of PKH consist of:

a) Improve the isocio-economic iconditions iof RTSM;

b) Improve ithe ilevel iof ieducation iof RTSM children;

c) Improve iithe ihealth iand inutrition istatus iof ipregnant iwomen, ipost- partum imothers, iand ichildren iunder 6 years of RTSM;

d) Improve iaccess iand iquality iof ieducation iand ihealth iservices, iespecially ifor RTSM.

The itarget or PKH ibeneficiaries iare iVery iPoor iHouseholds i(RTSM) who have family imembers iconsisting iof ichildren iaged i0-15 iyears iand i/ ior pregnant / childbirth mothers and are in selected locations. Beneficiaries are mothers or adult women iwho itake icare iof ichildren iin ithe ihousehold concerned because this is to fulfill these require ments effectively.

In the 2019 State Revenue and Expenditure Budget (Draft State Budget), the government proposes to increase the budget of the Family Hope Program (PKH) to Rp 34.4 trillion from the 2018 APBN only Rp 17 trillion. For information, the government will increase the social assistance protection budget in the 2019 RAPBN to Rp 381 trillion from Rp 287.7 trillion in the 2018 APBN so that the PKH budget can be doubled. The number of family beneficiaries (KPM) Program Family Hope in the last 5 years can be seen in the graph below:

Graph 1. Number of Beneficiary Families (KPM) of the Harapan Families Program

Source. Ministry of Social Affairs

In the graph above it can be seen that in the last five years the number of family beneficiaries of the hope family program experienced a significant increase, which is 2019 the total number of KPM PKH members was 17,911,452 with details of pregnant women 165,851 people, early child-hood 3,210,000 people, elementary school children 6,644,900 inhabitants, SMP 3,581,800 inhabitants, SMA 2,585,400inhabitants, elderly 1,612,200 inhabitants and persons

3,500,000

6,000,000 6,200,000

10,000,000

17,911,452

- 5,000,000 10,000,000 15,000,000 20,000,000

2015 2016 2017 2018 2019

Penerima Bantuan Program Keluarga Harapan

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with severe disabilities 110,992 inhabitants. Of the KPM above, which amounted to 17.91 people when compared with the number of poor people in 2019, amounting to 25.14 million.

The percenttage of PKH programs only covers 71.24 percent of the poor population in Indonesia.

Prosperous Rice Program (RASTRA) / Non-Cash Food Aid

Poverty and Food Vulnerability in Indonesia are challenges facing the government from time to time. To alleviate poverty and increase public access to food, the government uses various programs and stimuli. One of them is the Prosperous Rice Program (Rastra, previously called Raskin).

The distribution of subsidized rice for low-income people has been carried out by the Government of Indonesia since 1998. This program was originally called the Special Market Operations which was implemented as an emergency program to respond to the economic crisis that occurred at that time. In its development, the subsidized rice program has expanded its function as part of a social protection program aimed at reducing the expenditure burden of low-income people in fulfilling basic rights in the form of basic food needs and is known as Raskin / Rastra.

In the general manual for literary subsidies, it is explained that ithe idistribution iof isubsidized irice ito ilow-income igroups iaims ito ireduce ithe iexpenditure iburden iof iBeneficiary iTarget iFamilies i(KPM) iin imeeting ifood ineeds. iBesides, iit iis ialso ito iincrease iaccess ito ilow-income ipeople iin imeeting ibasic ifood ineeds ias ione iof itheir ibasic irights. iThe itarget iof ithe iRastra iProgram iis ito ireduce ithe iburden iof iKPM iexpenditure iin imeeting ithe ifood ineeds iof irice ithrough ithe idistribution iof isubsidized irice iwith ian iallocation iof i15 ikg i/ iKPM/month ior ifollowing iCentral iGovernment ipolicy. (Pedum Rastra, 2017)

In 2017 the literary program was itransformed iinto ithe iNon-Cash iFood iAssistance iProgram (BPNT) ibased ion ithe iRepublic iof iIndonesia's iPresidential iRegulation iNumber i63 ithe iYear i2017 iconcerning iDistribution iof iNon-Cash iSocial iAssistance and Minister of Social Affairs Regulation No. 11 of 2018 concerning Distribution of iNon-Cash iFood iAid, iwhich iaims ito iensure ithe program has become more targeted, right in quantity, on time, on price, on quality, and administration. The BPNT program will be implemented in areas that have limitations in terms of non-cash infrastructure, telecommunications signals, and geographical access.

In 2019, BNPT touched 15.6 million poor households (RTM) in 514 districts/cities throughout Indonesia. The value of BPNT 2019 reaches Rp 20.5 trillion. The data used to determine beneficiary families is through data per region belonging to the Central Statistics Agency (BPS). BPNT recipients are 25% of the poorest families, according to economic conditions in each region.

Joint Business Group Program (KUBE)

The social ministry as part of an institution that focuses on social welfare development programs carrying out activities aimed at empowering the poor. One of the program activities issued iby ithe iMinistry iof iSocial iAffairs through the Field iof iPoor Management of the Social Service is the Joint Business Group (KUBE) ibased ion ithe iregulation iof ithe iMinister iof iSocial iAffairs iNumber 25 of 2015 concerning Joint Business Groups and then amended ito ithe iMinister iof iSocial iAffairs iRegulation Number 2 of 2019 concerning Social Business Assistance Productive Economy To Joint Business Groups For Poor Poor Handling.

KUBE is a group iof ipoor ifamilies iformed, igrowing iand ideveloping ion itheir initiative in carrying out productive economic ventures to increase family income. The Joint Business Group Approach (KUBE) is an integrated approach of 15 programs for handling the poor or continuing Social Empower-ment Direct Aid (BLPS). With the establishment of the KUBE program, disadvantaged groups of people can participate in carrying out economic ISSN: 2668-7798 www.techniumscience.com

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development activities, so that the community can meet their daily needs. The purpose of the issuance of this program is none other than for the sustainability of the community, espe-cially the people who are unable to get the opportunity to improve the economy so that they get jobs to maintain their livelihoods, in turn, able to prosper the community, move the national economy in the lower classes, develop an entrepreneurial spirit, develop the system business networks, increasing people's economic independence, and increasing income.

Inequality in the Rural Economy

In measuring the level of inequality in Indonesia, the Central Statistics Agency (BPS) uses expendi-ture data as a proxy for income sourced from the National Socio-Economic Survey (Susenas). This is done consi-dering income data is difficult to obtain. The level of income inequality is one aspect of poverty that needs attention because basically the level of income inequality is a measure of relative poverty. The imost icommonly iused imeasure in measuring income iinequality iis ithe iGini Ratio and the percentage of income in the lowest 40 percent population group, also known as the World Bank size. Data for the April 2020 edition of the monthly economic data (BPS, 2018) is the ratio ibetween iurban iand irural iareas iin iIndonesia by province

Table 2 Gini Ratio by Province and Region September 2019 *

No The province Urban Rural

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1 Aceh 0.35 0.27

2 Bengkulu 0.37 0.28

3 Jambi 0.35 0.29

4 Bangka Belitung Islands 0.27 0.22

5 Riau islands 0.34 0.26

6 Lampung 0.35 0.29

7 Riau 0.37 0.28

8 West Sumatra 0.32 0.27

9 South Sumatra 0.36 0.31

10 North Sumatra 0.34 0.26

11 Banten 0.36 0.29

11 Gorontalo 0.40 0.39

12 Jakarta 0.39 -

13 West Java 0.41 0.32

14 Central Java 0.38 0.32

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15 East Java 0.37 0.31

16 West Kalimantan 0.34 0.28

17 South Borneo 0.36 0.28

18 Central Kalimantan 0.37 0.29

19 East Kalimantan 0.33 0.29

20 North Kalimantan 0.29 0.28

21 Maluku 0.29 0.29

22 North Maluku 0.30 0.26

23 Bali 0.37 0.31

24 West Nusa Tenggara 0.40 0.33

25 East Nusa Tenggara 0.34 0.31

26 Papua 0.29 0.41

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27 West Papua 0.32 0.42

28 West Sulawesi 0.44 0.32

29 South Sulawesi 0.39 0.35

30 Central Sulawesi 0.34 0.29

31 Southeast Sulawesi 0.40 0.35

32 North Sulawesi 0.38 0.35

33 Yogyakarta 0.43 0.33

Source: Statistics of Indonesia

In September 2019, the Gini ratio was recorded at 0.380, down from the Gini Ratio in March 2019 of 0.382. This figure also decreased when compared to the Gini Ratio in September 2018 which amounted to 0.384. This condition shows that the distribution of expenditure in Indonesia experienced an improvement during the period September 2018-September 2019.

Based on residential areas, the Gini Ratio in urban areas in September 2019 was 0.391, down compared to the March 2019 Gini Ratio of 0.392, and unchanged compared to the September 2018 Gini Ratio which was also 0.391. Meanwhile, the Gini Ratio in rural areas in September 2019 amounted to 0.315. This figure is down when compared to the March 2019 Gini Ratio of 0.317 and the September 2018 Gini Ratio of 0.319. Distinguished by region, in September 2019 the percentage of population expenditure iin ithe ilowest i40 ipercent population group in urban areas was 16.90 percent. Meanwhile, iin irural iareas, iit iwas irecorded iat i20.66 ipercent. Therefore, based on World Bank criteria, urban areas are iclassified ias imoderate iwhile irural iareas are classified as low.

Based on statistical data from programs that have been carried out and also data on the amount of poverty nationally that tends to decrease this indicates that there has been progressing in poverty alleviation.

However, it might be worth noting that data collection on the amount of poverty needs to be monitored and monitored. Also related to specific data for poverty alleviation iprograms ithat ihave ibeen icarried iout iin ithe iopinion iof ithe iwriter should be done 1) Evaluation of data especially data on Beneficiary Families (KPM) in each poverty alleviation program, is done aims to determine whether the beneficiary families are still entitled to receive or can be categorized out of the poverty line so that they are not entitled to receive benefits from existing programs. 2) Moral of beneficiary families who have completely separated from the category of Beneficiary Families from the program with their awareness to report to the local government, to be excluded from the list of beneficiary families. 3) The role of the Companion must be further increased given that programs that are run when not accompanied will seriously result in programs that are running as expected

The findings in this article are from several articles on poverty alleviation programs using a quantitative measurement approach. By only prioritizing quantitative measures, the qualitative phenomena of poverty that occur in the field are not explored. Therefore we need an approach other than quantitative (objective) data, namely qualitative ( subjective) measurement to complete an objective approach or economic measurement in measuring poverty will provide an opportunity to explore non-economic variables that influence the assessment of poverty.

Therefore several things related to the phenomenon that must be resolved in rural areas iin ithe icontext iof ipoverty ialleviation and to narrow the gap of inequality, namely with sustainable rural development. These developments are:

Rural Infrastructure Development

At present the proportion of the rural population compared to urban areas is no longer very different, however, it has a high economic disparity. Namely, the disparity in economic ISSN: 2668-7798 www.techniumscience.com

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growth, the high inumber iof ipoor ipeople iin irural iareas, and the low level of infrastructure services in rural areas are one of the problems faced in improving the local economy is the lack of adequate infrastructure, especially in rural areas. The condition of rural infrastructure services is generally still lacking, this can be seen from the majority of residents in underdeveloped villages who have to travel long distances to the marketing center (especially the subdistrict center), with poor road conditions.

Lack of access to markets to market products produced in rural areas as a result of the lack of infrastructure is a major obstacle to economic growth in rural areas. Several studies show the iimportance iof iinvesting iin iinfrastructure iimprovements isuch ias iroads ias ia ikey istep ito iincrease iaccess ito inew imarkets (Mu & Walle , 2009) can increase household productive capacity (Jacoby, 2000), iand ireduce itransportation icosts, iwhich ileads ito icheaper iinputs iand ihigher ilevels iof iproduction, iwhich iculminates iin ihigher ihousehold iincome iand iemployment ilevels i(Haughton and Khandker, 2009). These iresults itend ito iindicate ithat ibetter iconnectivity ibetween irural iand iurban iareas iprovides ia igreater imarket ifor iinputs iand ioutputs. Although rural to urban connectivity has proven to be beneficial in terms of efficiency, it tends to harm the deterioration of community culture and traditional livelihoods, which impacts disproportionately poor popu-lations. Another important infrastructure that must be built in rural areas, namely infrastructure in the fields of education, health, and public services is very important to maximize the benefits of rural development,

Diversification of the Agricultural Sector

The current rural economic activity in agriculture is still ian iintegral ipart iof iany iserious irural idevelopment istrategy ito iovercome ipoverty. Also, ifor imore iremote irural iareas, iwhere obstacles to iincreasing income are not overcome, agriculture is one of several viable options.

The agricultural approach proves to be imore ipro-poor ithan inon-agricultural ialternatives, iwith isome iresearch ishowing ithat ithe icontribution iof iagri-cultural igrowth ito ipoverty ireduction ican ibe ifour itimes ithat iof iindustrial iand iservice igrowt (Ravallion, Chen and Sangraula, 2007)

Examples of countries with strong rural bases such as China, with the scale of rampant urbanization in the last few decades, have ibeen ia iblessing ifrom isome ipretty impressive rural areas in China. The inequality coefficient calculated for rural China alone iexceeds i0.4, ia ifigure igenerally iconsi-dered iexcessive iwhen iit iis ibased ion ia icountry iwith ia irich iurban icore iand ipoor irural iinterior (Unger, 2002).

Seeing this the local government initiative should utilize the policy of agricultural modernization to encourage irural igrowth. iBy ifocusing ion ilocal iissues, namely how local governments can recommend healthy and progressive rural development policies.

Diversification of the agricultural sector is needed if the iagricultural isector iis ino ilonger iable ito ibe ithe main source of the community to earn income where due to the limited agricultural land in the village that has changed functions. Therefore the initiative to turn agriculture into a good rural growth driver and can reduce poverty.

Examples of regions that have successfully implemented diversifica-tion in the Agriculture sector are India, which have succeeded in shifting regions to higher values, such as horticultural cultivation (fruits and vege-tables), Agricultural processing that is designed with good technicality based on local conditions (Kumar et al., 2011)

By ipromoting iagriculture iwith idiversification in the emphasis ion imarketing iand iproduction iinnovation, ithe ieffect iis ito iincrease irural iincome iand igenerate inew ijobs.

iFor ifarm ilaborers, iit iis ivery iuseful ito ireduce ipoverty. iFurther-more, iby istrengthening ISSN: 2668-7798 www.techniumscience.com

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ithe ilocal iknowledge iand iskills ineeded ito idevelop ijobs ioutside iagriculture, the agricultural processing sector, encouraging new enterprises in the countryside to form so that development in the economy will be more advanced than other villages.

While it iis iclear ithat ithe iagriculture-based iapproach to rural development remains important as a driver of growth and poverty reduction, another alternative also needs to be considered that is balancing the agricultural sector with inon-agricultural istrategies ithat offer the best hope for the majority of rural areas.

In most cases, the agricultural sector cannot iprovide isustainable ilivelihoods ifor ithe inumber iof irural ipoor, ias ia iconsequence that communities are increasingly dependent on additional income from non-agricultural sources. However, farmers in rural areas are often reluctant to leave agriculture, this allows some family members of farmers to find work elsewhere usually urban and become urbanites in urban areas which will also impact on being urban poor if they are unable to compete for jobs with another society.

5. Conclusion

The programs that have been carried out indicate that there has been progressing in poverty alleviation that has been done with quantitative measurement indicators, namely the reduction in the number of poverty nationally that tends to decrease. However, it should be noted that data collection on the amount of poverty needs to be monitored and monitored.

Diversification of the agricultural sector is needed if the agricultural sector is no longer able to be the main source of the community to earn income where due to the limited agricultural land in the village that has been converted

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