Development strategies of agricultural sector toward environmental externalities: case study in East Java, Indonesia
Penulis/Author
Gilang Wirakusuma, S.P., M.Sc. (1); Prof. Dr. Ir. Irham, M.Sc. (2); Dr. Ir. Slamet Hartono, S.U., M.Sc. (3); Prof. Dr. Jangkung Handoyo Mulyo, S.P., M.Ec. (4)
Tanggal/Date
5 2019
Kata Kunci/Keyword
Abstrak/Abstract
This research was conducted to measure the agricultural sector’s externalities and to
generate a model of proper strategies to encourage sustainable economic development through
the agricultural sector. This research employed time-series data of 1987-2016 periods at
selected province in Indonesia (East Java). Agricultural sector’s externalities were addressed
by environmental degradation variables (greenhouse gas emissions) and environmental
carrying capacity variable. The 2006 IPCC guidelines for green house gas inventories tier 1
and land balance approach was utilized to calculate those externalities. Furthermore, for
generating a model of proper strategies, the second law of thermodynamics was applied
through a simultaneous equation model that was analyzed with Two-Stage Least Square
method. This research revealed that agricultural income, environmental degradation, and
environmental capacity have simultaneously significant interrelationship. Intensifying credit
allocation for rural farm household and adding direct investment in the agriculture sector can
decrease environmental degradation, escalate environmental carrying capacity, and increase
agricultural income.
