Agriculture Public Spending and Growth in Indonesia

Armas, Enrique Blanco ; Osorio, Camilo Gomez ; Moreno-Dodson, Blanca ; Abriningrum, Dwi Endah

关键词: ACCESS TO CREDIT;    ACCESS TO FOOD;    ACCOUNTING;    ACTUAL YIELDS;    AGRIBUSINESS;   

DOI  :  10.1596/1813-9450-5977
RP-ID  :  WPS5977

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper analyzes the trends andevolution of public spending in the agriculture sector inIndonesia, as well as the impact of public spending onagricultural growth. It finds that, in line with empiricalwork undertaken in other countries, public spending onagriculture and irrigation during the period 1976-2006 had apositive impact on agricultural growth, while publicspending on fertilizer subsidies had the opposite effect.The composition of spending patterns in Indonesia over thepast decade can partly explain why significant increases inpublic spending for agriculture have not resulted in acommensurate increase of agricultural production. The paperis structured as follows. Section I presents analytical andempirical findings about the impact of overall publicspending on growth, with a particular focus on Indonesia,followed by an analysis of the government's role inagriculture. More precisely, it discusses how publicspending can contribute to higher productivity and fastergrowth in the sector. The section draws lessons from theempirical literature and country examples worldwide,exploring the implications of some of these findings in theIndonesia context. Section II presents the results of anempirical analysis of the impact of agriculture publicspending on agriculture gross domestic product per capitagrowth in Indonesia, using time series analysis with bothordinary least squares and generalized method of momentseconometric techniques. Section III analyzes in detailagriculture public spending trends in Indonesia over theperiod 2000-08, highlighting that a large and increasingshare of the spending is being allocated to subsidies(fertilizer, credit, seeds) and to fund transfers to farmersand farmers' groups.