Agriculture Public Spending and Growth in Indonesia
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This paper analyzes the trends and
evolution of public spending in the agriculture sector in
Indonesia, as well as the impact of public spending on
agricultural growth. It finds that, in line with empirical
work undertaken in other countries, public spending on
agriculture and irrigation during the period 1976-2006 had a
positive impact on agricultural growth, while public
spending on fertilizer subsidies had the opposite effect.
The composition of spending patterns in Indonesia over the
past decade can partly explain why significant increases in
public spending for agriculture have not resulted in a
commensurate increase of agricultural production. The paper
is structured as follows. Section I presents analytical and
empirical findings about the impact of overall public
spending on growth, with a particular focus on Indonesia,
followed by an analysis of the government's role in
agriculture. More precisely, it discusses how public
spending can contribute to higher productivity and faster
growth in the sector. The section draws lessons from the
empirical literature and country examples worldwide,
exploring the implications of some of these findings in the
Indonesia context. Section II presents the results of an
empirical analysis of the impact of agriculture public
spending on agriculture gross domestic product per capita
growth in Indonesia, using time series analysis with both
ordinary least squares and generalized method of moments
econometric techniques. Section III analyzes in detail
agriculture public spending trends in Indonesia over the
period 2000-08, highlighting that a large and increasing
share of the spending is being allocated to subsidies
(fertilizer, credit, seeds) and to fund transfers to farmers
and farmers' groups.
Palabras clave
ACCESS TO CREDIT, ACCESS TO FOOD, ACCOUNTING, ACTUAL YIELDS, AGRIBUSINESS, AGRICULTURAL DEVELOPMENT, AGRICULTURAL ECONOMICS, AGRICULTURAL EQUIPMENT, AGRICULTURAL EXTENSION, AGRICULTURAL EXTENSION SERVICES, AGRICULTURAL GROWTH, AGRICULTURAL INPUTS, AGRICULTURAL MARKETS, AGRICULTURAL POLICIES, AGRICULTURAL POLICY, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, AGRICULTURAL PRODUCTS, AGRICULTURAL PROGRAMS, AGRICULTURAL R&D, AGRICULTURAL RESEARCH, AGRICULTURAL SCIENCE, AGRICULTURAL SECTOR, AGRICULTURAL TECHNOLOGIES, AGRICULTURE, AGRICULTURE CREDIT, AGRICULTURE MARKETS, AGRICULTURE ORGANIZATION, AGRICULTURE RESEARCH, AGRICULTURE SECTOR, AGRICULTURE SECTORS, ANIMAL HEALTH, ARABLE LAND, BEAN, BUDGET CONSTRAINTS, CATTLE, CENTRAL BANK, CENTRAL GOVERNMENT SPENDING, CEREALS, COMBINES, COMMODITIES, COMPETITIVENESS, CONSUMERS, CROPPING, CROPS, DEBT, DECENTRALIZATION, DEFICITS, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DIMINISHING RETURNS, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, ECONOMIC SURVEYS, ECONOMIES OF SCALE, ELIGIBLE FARMERS, EXPORT, EXPORT PERFORMANCE, EXPORTS, EXTENSION PROGRAMS, EXTERNALITIES, EXTERNALITY, FAO, FARM, FARMER ORGANIZATIONS, FARMERS, FARMLAND, FARMS, FINANCIAL CRISIS, FISCAL POLICY, FIXED COSTS, FOOD CROPS, FOOD PRICES, FOOD SAFETY, FOOD SECURITY, FORESTRY, FRUITS, GDP, GDP PER CAPITA, GENDER, GOVERNMENT EXPENDITURES, GOVERNMENT SPENDING, GRAIN, GRAIN PRICES, GRANTS TO FARMERS, GREEN REVOLUTION, GROSS DOMESTIC PRODUCT, GROSS DOMESTIC PRODUCT PER CAPITA, GROWTH RATE, HIGH YIELDS, HIGH-VALUE PRODUCTS, HOUSEHOLDS, HOUSING, HUMAN CAPITAL, IFPRI, INCOME, INCOME LEVELS, INCOME SUPPORT, INCOMES, INTELLECTUAL PROPERTY, INTELLECTUAL PROPERTY RIGHTS, INTEREST RATES, INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE, INTERNATIONAL MARKETS, IRRIGATION, IRRIGATION SYSTEMS, LIVESTOCK, MACROECONOMIC STABILITY, MAIZE, MAIZE YIELDS, MARGINAL PRODUCTIVITY, MARKETING, MARKETING ASSISTANCE, MEATS, MOA, MULTIPLIER EFFECTS, MULTIPLIERS, NATIONAL GOVERNMENTS, NEGATIVE EXTERNALITIES, NEW TECHNOLOGIES, OPPORTUNITY COST, OPPORTUNITY COSTS, POLITICAL ECONOMY, POLLUTION, POSITIVE EXTERNALITIES, POTATOES, POVERTY REDUCTION, PRIVATE GOODS, PRIVATE SECTOR, PRODUCTION INCREASES, PRODUCTION INPUTS, PRODUCTIVITY, PRODUCTIVITY GROWTH, PROPERTY RIGHTS, PUBLIC, PUBLIC DEBT, PUBLIC ECONOMICS, PUBLIC EXPENDITURE, PUBLIC EXPENDITURE REVIEW, PUBLIC EXPENDITURE REVIEWS, PUBLIC EXPENDITURES, PUBLIC FINANCE, PUBLIC FUNDS, PUBLIC GOOD, PUBLIC GOODS, PUBLIC INFRASTRUCTURE, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC RESOURCES, PUBLIC SECTOR, PUBLIC SERVICES, PUBLIC SPENDING, QUALITY STANDARDS, QUARANTINE, RESEARCH & DEVELOPMENT, RESOURCE ALLOCATION, RICE, RICE CULTIVATION, RICE RESEARCH, RICE YIELDS, RISK AVERSE, ROADS, ROOTS, RURAL AREAS, RURAL INFRASTRUCTURE, RURAL POVERTY, RURAL ROADS, SEEDS, SOCIAL WELFARE, TAX, TAX REVENUE, TAX REVENUES, TAXATION, TECHNICAL ASSISTANCE, TECHNOLOGY TRANSFER, TRANSACTION, TRANSITION ECONOMIES, TREASURY, UNITED NATIONS, UNIVERSITIES, VEGETABLES, VOLUME, WATER RESOURCES