INVESTMENT IMPROVEMENT EFFORTS IN THE AGRICULTURAL SECTOR

Fafurida Fafurida (), Avi Budi Setiawan () and Shanty Oktavilia ()
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Fafurida Fafurida: Faculty of Economics, Universitas Negeri Semarang, Sekaran Gunungpati, Semarang City, Indonesia
Avi Budi Setiawan: Faculty of Economics, Universitas Negeri Semarang, Sekaran Gunungpati, Semarang City, Indonesia
Shanty Oktavilia: Faculty of Economics, Universitas Negeri Semarang, Sekaran Gunungpati, Semarang City, Indonesia

Regional Science Inquiry, 2019, vol. XI, issue 2, 49-57

Abstract: The agricultural sector in Central Java has great potential and contributes to the third largest GRDP. It can absorb the largest labor force. This sector also has a large impact on other economic sectors. However, investment in the agricultural sector is very small each year. This study aimed to determine the factors that caused low investment in the agricultural sector in Central Java Province, and formulated priority programs in increasing investment in the agricultural sector in Central Java Province. It used quantitative approach with primary and secondary data. The analyses used were regression using the Ordinary Least Square (OLS) and Analytic Hierarchy Process (AHP) estimation methods. The findings of this study indicated that the factors that influenced the low investment in the agricultural sector in Central Java was Gross Regional Domestic Product (GRDP). Labor was the main criterion in increasing investment in the agricultural sector in Central Java Province. The next criteria were the criteria for the availability of land for agriculture, GRDP criteria, and the criteria for credit interest rates. Factors that hinder the strategy of increasing investment in the agricultural sector were infrastructure, low quality of human resources in the agricultural sector, and lack of access to capital. The solutions that can be done are by reducing the conversion of agricultural land, improving the quality of labor in the agricultural sector, and providing easy access to banking capital for farmers.

Keywords: Investment; Agriculture; Strategy; Central Java; Analytic Hierarchy Process (search for similar items in EconPapers)
Date: 2019
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