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The Impact of the Rice Intensification Loans on Land Productivity, Input Use, and Income Distribution: The West Java Case, Indonesla
Thesis Abstract:
The impact of the Bimbingan MassaI (BIMAS) Rice lntensification Loans (RIL) on land productivity, input use, and income distribution were analyzed. Data from the lndonesian Consequences of Small Rice Farm Mechanization of the lntenational Rice Research Institute were used.
The study employed three main hypotheses, namely: that credit rationing seems biased on favor of healthy farmers: that given the production possibility boundaries and that farmers are rational. BlMAS-RIL program farmer participants tend to use higher level of input factors with higher level of output that results in farm income and since the RIL reduces financial stress, it results in the effective price of input factors; and that the wealthy farmers tend to employ more non-land capital instead of labor and its fertilizer and chemical complements.
Test of independence indicated that participation in the BIMAS-RIL program cannot be independent of farm wealth and thus, it conformed with the first hypothesis.
Using the t-test procedure wilh an analysis of variance as a cross, check it was concluded that, panicularly during the wet season, land productivity for the participant farmers tended to be higher than non-participant farmers due to their greater use of fertilizer and chemicals.
While not more productive than less wealthy ones, wealthy farmers tended to use more per hectare non-land capital instead of labor and its fertilizer and chemical complements. The input demand econometric model further suggested that RlL had no effect on pre-harvest (hired and total) labor employed and positive effect of non-land capital. Also, farm w'ealth (and farm size) had negative effect on pre-harvest labor employed but positive on non-land capital.
Patternss of shares, absolute and relative, indicated that participant farmers who were less wealthy tended to be more productive than other groups but they had the least per hectare income because they paid a considerable amount of land-rent payments; besides, this group tended to pay the highest to hired labor. More RIL given to the less wealthy farmers was therefore suggested.