Role of the Agriculture Sector in Poverty Reduction in East Kalimantan

Abstract

The agricultural sector provides support for food availability, employment, and increases household income in the urban or rural area. Household income determines expenditure and becomes the basis for determining the poverty line. East Kalimantan economy is still dominated by the mining sector. The development of agriculture has shifted the contribution of the sector to Gross Domestic Regional Product (GDRP). The research purpose was to analyze the role of the agriculture sector in poverty reduction. The data was time-series data of poverty and GDRP of East Kalimantan from 2011 to 2020. Descriptive analysis and regression analysis were used in this research. The results indicated that the poverty rate was average 0.10 %, the urban poverty rate was 4.77 %, and the rural poverty rate was -3.32 %. The contribution of the agriculture sector to GDRP was average 7.19 % and the average growth of agriculture GDRP was 9.06 %. Average agricultural labor absorption was 23.82 % from the working population, 76.99 % in rural and 23.01 % in urban. The agriculture sector has a statistically significant impact on reducing rural poverty. The coefficient regression was -0.1771 and t-value -7.78. It is significant at level 5 %. This implies that agriculture can be reducing poverty by labor absorption, increasing labor productivity, and shifting agriculture towards increasing products that provide added value.