Significant role of Corporate to Reduce Farmers Poverty: A Lesson from Eastern Kalimantan, Indonesia

Abstract

Abstract CSR implementation in Indonesia is regulated within the Republic of Indonesia Law Number 40 of 2007. Supported by these regulations, the implementation of CSR has the same goal as the agricultural development goal, namely to improve the welfare of the farmers. Among the sustainable development goals which will be collaborated with CSR is the poverty reduction within the agricultural sector. There are many studies on CSR disclosure within the company’s perspective, but an overview of the role of CSR implementation in agriculture in reducing farmer poverty remains limited. To find out the poverty level of farmers before and after receiving CSR assistance is part of the purpose of this study. In addition, this study also wants to prove whether CSR assistance has an impact on reducing the poverty level of farmers. This activity was carried out in East Kutai, East Kalimantan Province with 61 farmers spread over 4 villages which were selected purposively. Identification of poverty levels is based on the Central Bureau of Statistics criteria, index of headcount, index of poverty depth, and index of poverty severity. Meanwhile, to find out the impact of CSR assistance, it’s seen through the difference in poverty levels before and after receiving CSR assistance and is tested statistically. The results indicated that CSR assistance had a significant effect on reducing the poverty rate of farmers, from 16.4% to 5.8%. This finding showed that the implementation of CSR assistance is able to contribute positively in overcoming a very important problem in the agricultural sector, namely reducing farmer poverty.