Factors Influencing Indonesia^s Agricultural Sector in the Era of Climate Change
Qiki Qilang Syachbudy(a*), Yusman Syaukat (b), Noer Azam Achsani (b), Nia Kurniawati Hidayat (b)

a) Faculty of economics and management, IPB University
Jl. Raya Dramaga, Kampus IPB Dramaga Bogor, 16680 West Java, Indonesia
*qikiqilang[at]apps.ipb.ac.id

Abstract

The agricultural sector has a very important role in Indonesia to fulfill food needs and as an economic driver. This research aims to analyze the factors that influence the Indonesian agricultural sector in 1981 - 2021, which includes agricultural production and the economic value of the agricultural sector. The issue of climate change is an important matter that concerns the agricultural sector today. The variable used as a proxy for the climate change issue is greenhouse effect data. The method used in this research is the Autoregressive Distributed Lag (ARDL) model. The research results show that in the long term, the variables that have a significant influence on the Indonesian agricultural sector are agricultural land area and economic growth. Meanwhile, in the short term, the variables that have a significant influence are agricultural land area, economic growth, and the amount of fertilizer used. Meanwhile, climate change factors have been proven to cause a decline in the agricultural sector, although it does not have a significant effect. Based on the results obtained, it shows that government policy is very necessary in developing the agricultural sector in Indonesia, both in the areas of fertilizer procurement, expanding agricultural land, as well as advancing strategic sectors that accelerate economic growth and support the agricultural sector.

Keywords: agricultural sector, ARDL model, climate change, Indonesia

Topic: Climate Change Mitigation and Policy