Agricultural production and its implications on economic growth and poverty reduction

Abstract

The objective of the study was to analyze the magnitude of factors affecting Agricultural Production and its implications on Gross Regional Production (GRP) Growth and Poverty Reduction. Panel data from 6 provinces of center production of paddy of Indonesia for 10 years (2007-2016) were analyzed by Path Analysis method. Productivity of Agricultural Land and Wetland Area has a very strong relationship with Agricultural Production. The productivity of Agricultural Land is the dominant factor and has the significant effect on Agricultural Production. Agricultural Production has no significant effect on GRP growth rate. Agricultural Production has not been able to reduce poverty. GRP growth rate has the significant effect and is the dominant factor for poverty reduction. Based on the finding of the research, government policy programs for poverty reduction in rural areas can be done by improving agricultural cultivation technology, the extent of wetland area, increasing of agriculture-based industries and the provision of poverty reduction programs budget.