The Effect of Increasing Temperature on Welfare of Plantation Farmers

Abstract

Agricultural productivity is a determining factor in achieving food security in Indonesia. Increase in agricultural productivity yields is strongly influenced by climate change. Extreme climate change has resulted in crop failure due to land drought and flooding. The existence of this incident provides an opportunity to decrease the welfare of farmers, especially plantation farmers in Indonesia. The purpose of this study was to determine the effect of temperature on the welfare of plantation farmers in Indonesia. The data used in this study was sourced from the 2018 National Socio-Economic Survey (SUSENAS) data, with a total of 66,754 households in Indonesia. The analytical method used is Ordinary Least Square (OLS). The results of this study indicate that an increase in temperature causes drought, and has an impact on decreasing agricultural productivity. The decrease in the production of agricultural products certainly reduces the income of farmers, which results in a decrease in the level of welfare of farmers. Government policies in terms of climate engineering are needed, as well as assistance programs for farmers to maintain the welfare of farmers.