Rural proverty in Indonesia
Indonesia is the largest economy in South-East Asia and has progressed
rapidly over the past decade into a dynamic, highly competitive and
decentralized electoral democracy with a rapidly growing middle class.
Steady economic growth has led to a gradual reduction in overall poverty
in the country, which fell from 17 per cent in 2004 to 11 per cent in
2014.
Despite this, nearly 40 per cent of Indonesians still live just above the national poverty line. These ‘near poor' households are vulnerable to shocks such as food price increases, environmental hazards and ill health, which can easily drive them into poverty.
Although recent improvements in education and health sectors have occurred, public services and health standards still lag behind other middle-income countries. High rates of child malnutrition, maternal mortality, and inadequate access to education, safe water and sanitation are persistent problems among poor communities.
Three out of five Indonesians live in rural areas. Farming is their main occupation. The agriculture sector's value added as a percentage of the gross domestic product (GDP) was reported at 17 per cent in 2011. While the agriculture sector's share of the country's GDP declined markedly during the last five decades, it still provides income for the majority of Indonesian households. Progress is also visible in rural areas. Nevertheless, poverty remains concentrated, with 13.8 per cent of rural people classified as poor compared with 8.2 per cent of urban populations in 2014 Households working in informal agriculture are 2.1 times more likely to be poor than those working in other sectors, 2012 Government of Indonesia figures indicate. The poorest in rural areas tend to be farm labourers working on other people's land or smallholders with extremely small plots (<0.5 ha).
With its vast and abundant fertile soils, Indonesia is a major global producer of a wide variety of tropical products, offering strong opportunities to smallholder producers. Yet, millions of smallholder farmers, farm workers and fishers are materially and financially unable to tap into these resources. They are often geographically isolated and lack access to agricultural extension services, markets and financial services.
Food production is still largely focused on meeting subsistence needs. The country produces crops with potentially high market value such as cocoa, coffee, nutmeg and cloves. In order to take full advantage of this opportunity however, a higher level of investment in management, processing and marketing systems is necessary to expand production.
Another sector with enormous potential is fisheries. Besides being an important food source, fisheries is also a commercial commodity for export and earning foreign exchange.
It is estimated that 7.9 million Indonesian fishers are engaged in small-scale fisheries and account for 92 per cent of overall fisheries production. While many coastal and fishing communities have a thriving marine economy, others face an increasing struggle to achieve a good return due to difficulty in accessing markets and – in some areas – declining catch levels. Limited access to capital and equipment, rising operational costs and high risks are some of the additional problems faced by these communities.
There is large variation in poverty in Indonesia. Poverty statistics published by the government in 2012 show that, while the highest incidence of rural poverty exists in the eastern islands, most of Indonesia's rural poor live in the densely populated western regions of the archipelago, namely Java.
Ethnic minority groups and women are also more likely to experience poverty. Indonesia comprises about 300 ethnic groups speaking a wide variety of languages, most of whom live on the larger islands. There are however no precise estimates of income poverty levels among ethnic minority populations. These communities are often not fully integrated into mainstream economic activities. They may also experience lack of access to education, poor health, absent or limited basic social services and facilities.
Women, too, tend to have less access to education, earn less than men, and are subject to discrimination and exclusion from decision-making processes within households and communities. Civil unrest has created many women-headed households who tend to be among the poorest and most vulnerable. Also affected are those who have been displaced from their land because of the unrest and have lost farm tools and fishing equipment.
Despite this, nearly 40 per cent of Indonesians still live just above the national poverty line. These ‘near poor' households are vulnerable to shocks such as food price increases, environmental hazards and ill health, which can easily drive them into poverty.
Although recent improvements in education and health sectors have occurred, public services and health standards still lag behind other middle-income countries. High rates of child malnutrition, maternal mortality, and inadequate access to education, safe water and sanitation are persistent problems among poor communities.
Three out of five Indonesians live in rural areas. Farming is their main occupation. The agriculture sector's value added as a percentage of the gross domestic product (GDP) was reported at 17 per cent in 2011. While the agriculture sector's share of the country's GDP declined markedly during the last five decades, it still provides income for the majority of Indonesian households. Progress is also visible in rural areas. Nevertheless, poverty remains concentrated, with 13.8 per cent of rural people classified as poor compared with 8.2 per cent of urban populations in 2014 Households working in informal agriculture are 2.1 times more likely to be poor than those working in other sectors, 2012 Government of Indonesia figures indicate. The poorest in rural areas tend to be farm labourers working on other people's land or smallholders with extremely small plots (<0.5 ha).
With its vast and abundant fertile soils, Indonesia is a major global producer of a wide variety of tropical products, offering strong opportunities to smallholder producers. Yet, millions of smallholder farmers, farm workers and fishers are materially and financially unable to tap into these resources. They are often geographically isolated and lack access to agricultural extension services, markets and financial services.
Food production is still largely focused on meeting subsistence needs. The country produces crops with potentially high market value such as cocoa, coffee, nutmeg and cloves. In order to take full advantage of this opportunity however, a higher level of investment in management, processing and marketing systems is necessary to expand production.
Another sector with enormous potential is fisheries. Besides being an important food source, fisheries is also a commercial commodity for export and earning foreign exchange.
It is estimated that 7.9 million Indonesian fishers are engaged in small-scale fisheries and account for 92 per cent of overall fisheries production. While many coastal and fishing communities have a thriving marine economy, others face an increasing struggle to achieve a good return due to difficulty in accessing markets and – in some areas – declining catch levels. Limited access to capital and equipment, rising operational costs and high risks are some of the additional problems faced by these communities.
There is large variation in poverty in Indonesia. Poverty statistics published by the government in 2012 show that, while the highest incidence of rural poverty exists in the eastern islands, most of Indonesia's rural poor live in the densely populated western regions of the archipelago, namely Java.
Ethnic minority groups and women are also more likely to experience poverty. Indonesia comprises about 300 ethnic groups speaking a wide variety of languages, most of whom live on the larger islands. There are however no precise estimates of income poverty levels among ethnic minority populations. These communities are often not fully integrated into mainstream economic activities. They may also experience lack of access to education, poor health, absent or limited basic social services and facilities.
Women, too, tend to have less access to education, earn less than men, and are subject to discrimination and exclusion from decision-making processes within households and communities. Civil unrest has created many women-headed households who tend to be among the poorest and most vulnerable. Also affected are those who have been displaced from their land because of the unrest and have lost farm tools and fishing equipment.
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