Abstract
In the industry revolution 4.0 era, the agriculture sector still has an important position in human life because, without this sector, human capital development cannot be well developed. Globally, the share of agriculture, forestry, and fishing sector has declined significantly in the last two decades. However, the demand on agriculture product, especially rice, incline every year. Rice supply and demand projection with appropriate methods are very important because their result affect how agricultural policies are applied. The aim of this study is to examine the likely evolution of rice consumption in Indonesia and forecast the Indonesia rice consumption per capita based on global data. The results indicate the income elasticity of demand for rice in the Indonesia has become negative. The forecast of model show that Indonesia’s rice demand will keep incline, at least in the next five years. Due to those result, in order to maintain farmers’ wealth, modernization in agriculture is needed. Government has encouraged some programs such as Simluhtan, Katam, Si Mantap, Smart Farming, Smart Green House, Autonomous Tractor, dan Smart Irrigation to accelerate the agricultural transformation. Unfortunately, human resource quality becomes a problem. Indonesia need massive effort so that modernization in agriculture works well.
Highlights
There is a long historical literature examining the topic, the role of agriculture in economic development is complicated enough. Timmer (1988) said that the structural transformation itself, which is a general equilibrium process not understood from within the agricultural sector
Another reason for controversy over the role of agriculture stems from the heterogenity of agricultural endowments and the vastly different cropping systems seen in Latin America, Africa and Asia (Bravo-Ortega & Lederman, 2005)
In this industry revolution 4.0 era, the agriculture sector still has an important position in human life because, without this sector, human capital development cannot be well developed
Summary
There is a long historical literature examining the topic, the role of agriculture in economic development is complicated enough. Timmer (1988) said that the structural transformation itself, which is a general equilibrium process not understood from within the agricultural sector. Bank data (2010), Indonesia is the thirdlargest rice consuming country in the world after China and India, which is around 28 million metric tons annually This figure is expected to rise every year along with an increase in population. Peterson et al (1991) developed their model to account various influences on rice disappearance They argued that human rice consumption should be estimated on a per capita basis to allow an assessment of the potentially conflicting effects of population and income growth. They adopted loginverse-log model used by Ito et al (1989). The actual data used for model selection and estimation are annual global data from 1980 to 2013 with some missing information in several countries
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