Empowering Indonesian Young Farmers through Youth Entrepreneurship and Employment Support Services Program

Empowering Indonesian Young Farmers through Youth Entrepreneurship and Employment Support Services Program

Published: 2023.08.31
Accepted: 2023.08.29
58
Consultant
Indonesian Agricultural Researcher’s Alliance (APPERTANI)
Director
Agricultural Education Center, Indonesian Ministry of Agriculture

ABSTRACT

The farmer regeneration issue is not only faced by Indonesians. Almost all countries in the world are having the same issue. In other words, the concerns surrounding farmer regeneration are not specific to the people of certain countries, but they are relevant to the whole global community. In Indonesia, the majority of the people in the agricultural sector are carried out by old (aging) farmers. Young farmers are less interested in agriculture due to some reasons such as limited access to land, market, and financial services, natural and price risks, unpopular jobs, low and inadequate income, and lack of incentives. The government of Indonesia has established the Millennial Agricultural Entrepreneur Development program towards increasing the interest of the younger generation to do business in the agricultural sector. Specifically, the country has implemented the Youth Entrepreneurship and Employment Support Services (YESS) program to create opportunities for rural youth to build their economic livelihoods through rural entrepreneurship or employment. It shows that the program is having a positive impact on employment, entrepreneurship, and income. Since the characteristics of youth depend on the region, social, and economic conditions; therefore, empowering young farmers should be based on their typical aspirations. Above all, young farmers need to be encouraged to keep their spirits continue being motivated and innovative and convert circumstances into opportunities, take advantage of information technology, produce quality products, and expand target markets through favorable policies. As a result, the Penta Helix collaboration approach involving government, communities, businesses, academicians, and media is recommended to support the implementation of the YESS program.

Keywords: young farmers, policy, YESS program, Indonesia

INTRODUCTION

The involvement of young farmers in agriculture is essential for ultimately addressing the significant growing demographic. However, there are challenges in engaging young farmers in agricultural development since they are facing: (1) Insufficient access to knowledge, information, and education; (2) Limited access to land; (3) Inadequate access to financial services; (4) Difficulties accessing green jobs; (5) Limited access to markets; and (6) Limited involvement in policy dialogue (FAO-CTA-IFAD, 2014).

In the case of Indonesia, the agricultural sector employs more than 38 million people; however, almost 80% of Indonesian farmers are over 45 years of age. There are 65 million youth in the country with an average age of 28 years. This youth population is not in line with its participation in the agricultural sector. The low interest of youth in the agricultural sector is a challenge, both in employment and entrepreneurship of on-farm and off-farm activities (Arsanti, 2020).

Youth have a low interest to work in agriculture that becomes a common problem in various countries. In Indonesia, at least certain factors caused many youths to feel less interested in agriculture since this sector is perceived as awkward related to land issues, social prestige, natural and price risks, low income, and lack of incentives (YASI, 2022). Therefore, it is required to attract and empower youth to be involved in the agricultural sector through training and provide them with appropriate facilities. In other words, the regeneration of farmers with the support of working ecosystems and holistic agricultural entrepreneurship is one of the key solutions.

The Government of Indonesia (GoI) has implemented a program known as the “Youth Entrepreneurship and Employment Support Services (YESS)”, collaborate with IFAD (International Fund for Agriculture Development), towards producing young rural entrepreneurs and a competent workforce in the agricultural sector that can transform villages. It is managed by rural youth integrated with employment and entrepreneurship in the agricultural sector which can increase income (Arsanti, 2020). Hence, this paper aims to discuss the implementation of the YESS program. It is supported by the overview and development policy of young farmers in Indonesia who are encouraged to follow the experts’ recommendations.

YOUNG FARMERS OVERVIEW

One of the critical substances of labor is related to the working-age population. It is commonly defined as persons aged 15 years and older, although the age limits can vary from country to country. In the case of Indonesia, the working age of labor is defined as those aged 15 to above 60 years old. It generally consists of age groups of 15-19 years old, 20-39 years old, 40-59 years old, and above 60 years old (BPS, 2018-2022). In the agricultural sector, Pusdatin (2020) classified the age group of farmers into three categories, namely: (1) Young age group (15-24 years old); (2) Prime age group (25-59 years old); and (3) Old age group (above 60 years old).

Indonesian agriculture is practically carried out by farmers with a range of ages 19-39 years old (young farmers) and 40 to above 60 years old (old farmers). The young farmer is commonly categorized as the “millennial generation” (ANA, 2022). Currently, the composition of millennial and old farmers in Indonesia is 40.43% vs. 59.57%, respectively. It indicates that the majority of the agricultural sector in the country is conducted by old (aging) farmers. Over the last five years (2018-2022), the total number of farmers increased by about 2.19% per year (Table 1). The highest increase was in old farmers (10.12 %/year). Conversely, the extent of millennial farmers slightly decreased by about 0.79% annually. As a result, the government must pay attention to the issue of regeneration of farmers.

According to the Indonesian Agency for Agricultural Resources Extension and Development (BPPSDMP, 2019), the interest of youth in agriculture tends to decrease. This will affect efforts to develop agriculture in the country. One of the fundamental problems of today’s youth is their reluctance to join the agricultural sector. Unrealistic and negative views toward agriculture and the existence of stimulating opportunities in non-agricultural sectors have resulted in a situation that makes youth question previous assumptions about succession farming (Widiyanti et al., 2020).

Certain internal and external factors are affecting the low interest of youth to participate in agriculture Internal factors are related to land issue, prestige, risks, and incentive aspects, while external factors are in line with income, opportunity, information and communication, and culture (Table 2). The former is related to the perception and attitude of youth toward agriculture, while the latter has an impact on the decision of youth to work in agriculture.

The agricultural sector no longer attracts the interest of generation Z, following millennials that were born in 1997 to 2012. Based on the results of the Jakpat survey (CNBC, 2022), only 6 out of 100 generation Zs want to work in agriculture. There are some reasons why many of these generation Zs are reluctant to work in agriculture. The majority perceive that there is no career development in agriculture and this sector is full of risks (Figure 1).

The study of Widiyanti et al (2020) underlines some points. First, the reluctance of young generations to work in the agricultural sector is a significant problem in terms of maintaining an adequate agricultural workforce. Second, ensuring continuity and adequate staffing on farms (farmer regeneration) is a substantial concern for those looking at the future stability of the agricultural sector. Third, stereotypical views of farmers and the farming profession are often fundamental to the problems of assuring agricultural regeneration and succession. Fourth, farming is seen as synonymous with poverty, a lack of prestige, and no chance of future success. Fifth, agriculture is perceived to be an unpopular career path with a lot of drawbacks (low financial rewards). Sixth, young people prefer employment options with high mobility and more promising prospects.  The main problem that youth faces is doubt; the skepticism about whether farming can provide welfare is difficult to overcome. The existing social reality has shaped the perception that farming is synonymous with poverty, lack of education, and dirty work that relies on physical ability rather than intellect. Young farmers want to build a positive perception of the agricultural sector so that they can overcome these existing stereotypes that encourage identity gaps.

With such a large population, Indonesia has opportunities to be more developed related to the availability of production labor resources and the consumption market. One of the opportunities that can be exploited by a large population is increasing the nation’s productivity, especially from human resources of productive age (15-64 years). The availability of sufficiently large productive age human resources, known as the demographic bonus or demographic dividend[1]  is predicted to occur from 2020 to 2030. Demographic dividends can be an advantage (window of opportunity) but vice-versa can also bring losses (window of disaster). It depends on how to manage it because the demographic dividend should not only be filled by human resources in terms of quantity but also equipped with human resources in terms of quality (Wantannas, 2017). Thus, young farmer development is a strategic policy to support the agricultural sector in Indonesia.

YOUNG FARMER DEVELOPMENT POLICY

The Indonesian Ministry of Agriculture has established the Millennial Agricultural Entrepreneur Development program for 2020-2024 with a target of 2.5 million millennial agricultural entrepreneurs covering all regions of Indonesia with an accumulated number of 500,000 millennials per year spread across five agricultural sub-sectors (Table 3). The recipients were selected and determined by opening online registration for millennials who were interested in joining the program with the condition that they had an Indonesian Identity Card (KTP). Recruitment process was carried out by program implementers based on the interest, motivation, and need criteria of millennials to start a business in the agricultural sector development. Those include who are not yet working, already working in the agricultural sector, and entrepreneurship categories. The selected millennials to join the program are within a one-year contract. Afterward, the millennials will be facilitated to collaborate with off-takers (banks) for capital provisions. Millennials are closely related to technology, especially social media information. This generation is responsive to technological changes and has high creativity that makes the opportunity to become an entrepreneur in the agricultural sector.

The Key performance indicators (KPIs) to evaluate the efficacy of the Millennial Agricultural Entrepreneur Development program are suggested in Table 4. These can assist the organizers of the program to monitor its progress, identify areas for improvement, and showcase the impact of the program to stakeholders. It is essential to define these indicators clearly and set realistic targets for each to have a meaningful assessment of the program’s success. However, these KPIs should be measurable, relevant, and aligned with the program’s objectives.

The Millennial Agricultural Entrepreneur Development program is driven by certain factors (BPPSDMP, 2020). First, the increasing population of young generation in Indonesia and interest of the youngers to do business in the agricultural sector can accelerate agricultural development. Second, efforts to create jobs for 12 million people in 2020-2024. Third, the presence of Job Creation Law[1]. Fourth, an existence of demographic dividend and considerable employment potential in the form of agricultural vocational education graduates and youth, especially in rural areas who are interested in the agricultural sector. Fifth, progress in the field of information technology as well as technological innovation and mechanization of agriculture has become an attraction for the youth to work in the agricultural sector. Sixth, increasing investment in the agricultural sector, providing incentives in the form of People’s Business Credit (KUR)[2] and agricultural insurance, the Three Times Export Movement (Gratieks) program[3], and others that can trigger the growth and development of millennial agricultural entrepreneurs. The objectives and targets of this program can be seen in Table 4.

The implementation strategy of the Millennial Agricultural Entrepreneur Development program is by enhancing the following elements:

  1. Role of local government leaders (village heads, sub-district heads, regents, and governors) to mobilize agricultural extension workers, other field officers, farmers, and business actors in growing millennial agricultural entrepreneurs.
  2. The synergy of agricultural actors and programs with other Ministries/Institutions.
  3. Networking with other government agencies and the private sector.
  4. Role of non-formal community leaders (National Outstanding Farmers and Fishermen Association/KTNA, farmer institutions, community leaders, religious leaders, associations, professional organizations, etc.) in agricultural development.

YOUTH ENTREPRENEURSHIP AND EMPLOYMENT SUPPORT SERVICES

Rationale

It is believed that a low proportion of formal employment, low earnings, and limited career progressions contribute to the agriculture sector having the lowest rate of youth participation. In addition, the national apprenticeship system, while open to young people with limited education, does not cover the agriculture sector. Entrepreneurship is an attractive path for many youths. The typical young entrepreneur runs a micro business, usually has a higher education background, and chooses to operate in urban areas. Those remaining in rural areas and wanting to work in the agri-business sector are challenged by the absence of structured value chains, limited linkages between economic players (buyers, suppliers, service providers, and entrepreneurs), and low access to business development services (IFAD, 2018). Given the range of diverse challenges simultaneously affecting youth engagement in the agricultural sector, as well as the heterogeneity of rural youth and their aspirations, it is expected that Youth Entrepreneurship and Employment Support Services (YESS) is one of the programs that can solve these problems for rural transformation and rural growth.

YESS is a collaboration program between the Indonesian Minister of Agriculture and the International Fund for Agricultural Development (IFAD). It is stated that: “Incentivizing youth engagement in rural transformation has the potential to increase youth employment and entrepreneurship. To most effectively achieve its aim of attracting young millennials to participate, YESS needs to focus on innovation, leveraging technology, modernizing agricultural employment and practices, and creating incentives for young people for rural entrepreneurship. YESS recognizes that not all young people can be successful entrepreneurs, and also that the agricultural sector does not have the absorptive capacity to provide meaningful opportunities for all young people, particularly when it is modernizing and reforming structurally. The design; therefore, envisages providing alternative pathways for creating on-farm and off-farm entrepreneurship as well as employment opportunities within the broader rural economy” (IFAD, 2020).

Objectives

The overall objective of the YESS program is to create opportunities for rural youth to build their economic livelihoods through rural entrepreneurship or employment. In other words, it aims to increase the engagement of youth in the rural sector, contribute to sustainable rural transformation, and develops a new generation of young farmers, agripreneurs, and rural supply chain actors (IFAD, 2018). It is expected that youth (men and women) are economically integrated with the agri-based sector through employment and entrepreneurship.

The strategic goal of the YESS program is to generate young rural entrepreneurs and a competent workforce in the agricultural sector that can transform villages. Meanwhile, the impact goals of this program are: (1) Young people gain skills for employment and business opportunities in the agricultural sector; (2) Young farmers and rural Micro, Small, and Medium enterprises (MSMEs) have access to markets and business development services; (3) Rural young farmers/entrepreneurs gain access to finance/financing and media environment that supports youth engagement in the agricultural sector; and (4) Policy and media environment that supports youth engagement in the agricultural sector (IFAD, 2018). Moreover, the development goal is rural youth integrated with employment and entrepreneurship in the agricultural sector which can increase income (Arsanti, 2020).

Activity

YESS is designed to generate a competent workforce of youth rural entrepreneurs as strong and quality millennial entrepreneurs in agriculture. This program develops the economy through entrepreneurship and increases job opportunities. The YESS program foresees four issues with the following main activities (IFAD, 2018):

  1. Young people acquire work readiness skills enabling them to take advantage of employment and business opportunities: (a) Capacity building for Technical Vocational Education and Training (TVET) institutions; (b) Career guidance and advice; (c) Improved Agricultural Young Entrepreneur Development Program (PWMP); and (4) Apprenticeship.
  2. Young farmers/rural entrepreneurs and Small and Medium-sized Enterprises (SMEs) access markets and services in the target value chains and sub-sectors: (a) Capacity building for Business Development Service (BDS) providers (BPP and P4S); (b) Outreach and mobilization networks; and (3) Start-up training package and mentorship.
  3. Young small farmers, rural entrepreneurs, and migrants have access to financing: (a) Capacity building for Financial Service Providers (FSP); (b) Financial education; and (c) Bridge financing.
  4. Enabling policy, institutional, and media environment facilitates youth engagement in the rural sector: (a) Provincial mapping and multi-stakeholder partnerships; (b) Rural youth mobilization program; and (c) Policy development.

From 2019 to 2025, the implementation target of YESS is 120,000 youth in rural areas (Arsanti, 2020). This includes four main activities: (1) Rural youth transition to work (increasing the capacity of rural youth in agriculture); (2) Rural youth entrepreneurship (development of young rural entrepreneurs); (3) Investing in rural youth (facilitating access to capital); and (4) Enabling environment for rural youth (building a conducive business environment). The main targets of the YESS program are as follows: (1) Improving the capacity of rural youth in agriculture; (2) Increasing income for 33,500 people; (3) Developing agricultural businesses for 50,600 people; (4) Providing 100,000 people to use financial services, among others are 4,300 young households; and (5) Facilitating financial education opportunities for 120,000 youth.

Strategy

Concerning the aforementioned issues and activities, YESS has certain strategies (IFAD, 2018). They are: (1) Facilitate school-to-work transition for young students and drop-outs; (2) Develop district-based support services to young small farmers and entrepreneurs as well as SMEs creating jobs/markets for young people; (3) Expand FSP capacities to address financial needs of young farmers, migrants, and entrepreneurs as well as facilitate access to finance for young people with limited professional experience; and (4) Improve youth perception of agriculture; and (5) Promote participatory policy development for young engagement in the agri-based sector.

Component

YESS activities are clustered into four interlinked and complementary components (IFAD, 2018). It includes:

  1. Component 1 (transition of rural youth to work) emphasizes increasing the capacity of agricultural vocational education institutions and developing certified apprenticeships.
  2. Component 2 (rural youth entrepreneurship) focuses on building the skills-sets of the rural youth and business development services and creating employment opportunities.
  3. Component 3 (investing for rural youth) links the capacitated youth to financial institutions and provides initial investments for young entrepreneurs.
  4. Component 4 (enabling environment for rural youth) aims to build a favorable policy environment where young rural workers and entrepreneurs can thrive through partnership building, mobilization of rural youth, policies for youth in agriculture, and project management.

The main consequences of these components are: (1) Young people acquire skills that enable them to take advantage of employment and business opportunities; (2) Young small farmers, rural entrepreneurs, and Small and Medium-sized Enterprises (SMEs) access markets and services in the targeted value chains and subsectors, and (3) Young smallholder farmers, rural entrepreneurs, and migrants and their families have access to financial products and services to finance their businesses.

Location

The locale of the YESS program includes 15 districts in four provinces (Figure 2). They are: (1) Sukabumi, Cianjur, Tasikmalaya and Subang districts in Jawa Barat province; (2) Malang, Pasuruan, Tulungagung, and Pacitan districts in Jawa Timur province; (3) Banjar, Tanah Laut, and Tanah Bumbu in Kalimantan Selatan province; and (4) Bantaeng, Bone, Bulukumba; and Maros in Sulawesi Selatan province.

Implementer

The main implementer of the YESS program involves national, provincial, and district institutions (Arsanti, 2020). It comprises of the following: (1) National Project Management Unit (managing the administrative activities and compiling the basic design and mechanism of program activities); (2) Provincial Project Implementation Unit (main executor in the implementation of activities at the project site and partners (supporters) in preparing the project design following the location requirements); (3) District Implementation Team (extension of Provincial Project Implementation Unit at the district level for the implementation of activities in identifying potentials and obstacles to challenges in the district as well as collaborating work with mobilizers, youth facilitators, mentors, Business Development Services Provider (BDSP), District Coordination Team (Bappeda), and all parties supporting the implementation of the Program).

Outcome and outreach

The outcome and outreach of YESS are presented in Table 6. It includes the extent and the result or consequence of the implementation of the program.

Challenges

YESS has certain challenges in terms of: (1) Ageing farmers and low youth participation in agriculture; (2) High rural-urban migration and increasing international migration of poor rural youth; (3) Employment in agriculture mostly informal and wages falling; (4)         Lack of young rural people access to services and markets; (5) Youths’ limited access to land; (6) Low access to finance for young farmers/entrepreneurs; (7) Agriculture regarded as a backward, low incentive sector by young generations; and (8) Insufficient linkages and coordination between public/private players to support youth engagement in the agri-based sector (IFAD, 2018). In line with the motto of the YESS program “Inclusive, Constructive, and Collaborative”; therefore, the implementation of this program: (1) Must be open to everyone and not limited to certain things: (2) All constraints and problems must be accommodated and communicated to all team members; and (3) Synergy with all stakeholders (government, private sector, youth forums, media, and others).

Above all, initial analysis shows that the project is having a positive impact on employment, entrepreneurship, and incomes. However, the impact on access to finance is more limited, but there is ample time for the latter to improve as implementation progresses (IFAD, 2023). The challenge is how to make financial services accessible in rural areas, especially for youth.

CONCLUSION AND POLICY RECOMMENDATION

The decreasing number of farmers is indicated by the age of the farmers who are generally old and there is a lack of interest in the younger generation to get involved in agriculture. It is not only related to economic reasons but also influenced by the globalized development of information technology. Therefore, it is necessary to empower young farmers to take over the role of the older generation. This can be employed by existing demographic dividends and the presence of the latest technology.

The implementation of YESS program is strategically implemented as a driving force for agricultural development, ensuring competitive and professional human resources in the agricultural sector, and having creative ideas for the advancement of the agricultural sector in Indonesia.

The characteristics of youth can be different, especially in Indonesia. It depends on region, social, and economic conditions. Apart from that, youth cannot be considered homogeneous. Age, gender, school enrolment, and family situation shape young people’s needs and preferences for financial and non-financial services and capacity-building. Hence, it is recommended that empowering young farmers should be based on their typical aspirations.

Young farmers need to be encouraged in terms of keeping spirit and motivation, having innovation, converting circumstances into opportunities, taking advantage of information technology, producing quality products, and expanding target markets through favorable policies. In line with technological developments, collaborative efforts to establish the ecosystem of agropreneur based on commodities cluster are needed between parties to provide opportunities for anyone (including young farmers, both male and female) in developing the agricultural sector. Through YESS program, local champions, young ambassador, start-up have been acknowledged. Accordingly, the Penta Helix collaboration approach involving government, communities, businesses, academicians, and media can be employed to support the implementation of this program.

REFERENCES

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ANA. 2022. Young Farmers: Training of Young Farmers for Agricultural Sector Development. Retrieved from: https://agrisustineri.org/training-of-young-farmers-for-agricultural-sec... (11 May 2023). Antara News Agency. Jakarta.

Arsanti, I. W. 2019. Pengembangan Kewirausahaan dan Kompetensi bagi Pemuda melalui Program YESS (Entrepreneurship and Competency Development for Youth through the YESS Program). Badan Penyuluhan dan Pengembangan Sumber Daya Pertanian (Agency for Agricultural Resources Extension and Development). Indonesian Ministry of Agriculture. Jakarta.

BPPSDMP. 2020. Rencana Strategis Badan Penyuluhan dan Pengembangan Sumber Daya Pertanian 2020-2024 (Strategic Plan of Agricultural Resources Extension and Development Agency 2020-2024). Badan Penyuluhan dan Pengembangan Sumber Daya Pertanian (Agency for Agricultural Resources Extension and Development). Indonesian Ministry of Agriculture. Jakarta.

BPS. 2018-2022. Keadaan Angkatan Kerja di Indonesia 2018-2022 (Labor Force Situation in Indonesia, 2018-2022).                           Indonesian Bureau of Statistics. Jakarta.      

BPS. 2022. Survei Angkatan Kerja Nasiona/National Labor Force Survey (SAKERNAS). Indonesian Bureau of Statistics. Jakarta.

CNBC. 2022. Terungkap! Ini penyebab anak muda ogah jadi petani (Revealed! This is the reason why young people refuse to become farmers). Retrieved from: 20221201110556-128-392831/terungkap-ini-penyebab-anak-muda-ogah-jadi-petani (18 May 2023). Consumer News and Business Channel. Jakarta.

FAO-CTA-IFAD. 2014. Youth and Agriculture: Key Challenges and Concrete Solutions. Published by the Food and Agriculture Organization of the United Nations (FAO) in collaboration with the Technical Centre for Agricultural and Rural Cooperation (CTA) and the International Fund for Agricultural Development (IFAD). Rome.

Gribble, J. N. and J. Bremner, 2012. Achieving a demographic dividend. Population Bulletin 67, 2. Population Reference Bureau’ Washington D. C.

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IFAD. 2020. Youth Entrepreneurship and Employment Support Services Programme. Supervision Report. Asia and the Pacific Division Programme Management Department International Fund for Agricultural Development. Jakarta.

IFAD. 2023. Mid-term Review of Youth Entrepreneurship and Employment Support Services Programme. Asia and the Pacific Division Programme Management Department. International Fund for Agricultural Development. Jakarta.

MoA. 2019. Gerakan Tiga Kali Ekspor Pertanian: Kobarkan Semangat Gratieks (Three Times Agricultural Export Movement: Blazing the Spirit of Gratieks). Majalah Warta Pertanian (Agricultural News Magazine), Vol. XII, December 2019. Indonesian Ministry of Agrciulture. Jakarta.

Pusdatin. 2020. Statistik Ketenagakerjaan Sektor Pertanin, Agustus 2020 (Agriculture Sector Employment Statistics, August 2020). Pusat Data dan Sistem Informasi Pertanian (Center for Agricultural Data and Information System). Indonesian Ministry of Agriculture. Jakarta.

Rafani, I. and T. Sudaryanto. 2021. Review of Indonesian Government Regulation Number 26/2021 on Implementation of Job Creation Law in the Agriculture Sector. Policy Article, 23 April 2021. https://ap.fftc.org.tw/article/2729. Food and Fertilizer Technology Center for the Asian and Pacific Region (FFTC-AP). Taipei.

Wantannas. 2017. Optimalisasi Pengelolaan Bonus Demografi dalam rangka Meningkatkan Indeks Pembangunan Manusia (Optimizing the Management of Demographic Dividend in order to Increase the Human Development Index). Indonesian Secretariat General of National Resilience Council. Jakarta.

Widiyanti, E., R. Karsidi, M. Wijaya, and P. Utari. 2020. Identity gaps and negotiations among layers of young farmers: Case study in Indonesia. Research Article. Open Agriculture 2020, 5: 361–374. https://doi.org/10.1515/opag-2020-0041. Published by De Gruyter.

YASI. 2022. Tiga Fenomena Petani Muda: Realita, Krisis dan Solusinya (Three Phenomena of Young Farmers: Reality, Crisis and Solutions). Retrieved from: https://agrisustineri.org/3-fenomena-petani-muda-realita-krisis-dan-solusinya/ (14 May 2023). Yayasan Agri Sustineri Indonesia. Jakarta.

Yofa, R. D., I. Rafani, and T. Sudaryanto. 2023. People’s Business Credit (KUR) Program Supporting Agricultural Development in Indonesia. Policy Article. 24 April 2023. https://ap.fftc.org.tw/article/3324. Food and Fertilizer Technology Center for the Asian and Pacific Region (FFTC-AP). Taipei.

 

[1] The demographic dividend refers to the accelerated economic growth that begins with changes in the age structure of a country’s population as its transitions from high to low birth and death rates (Gribble and Bremner, 2012). Indonesia will get a demographic bonus, namely the age of the workforce (15-64 years) reaches around 70%, while 30% of the population is unproductive (below 14 and over 65 years old) which will occur in 2020-2030 (ANA, 2009).

[2] Job Creation Law refers to generating work through facilitating, protecting, and empowering the improvement of the investment ecosystem as well as ease of doing business and investment of government towards accelerating the national strategic projects (Rafani and Sudaryanto, 2021).

[3] People’s Business Credit (KUR) is a financing scheme for working capital and investment provided to prospective beneficiaries who have productive and viable businesses, including agricultural businesses, but do not have additional collateral or the additional insufficient collateral (Yofa, Rafani, and Sudaryanto, 2023).

[4] The Indonesian Ministry of Agriculture targets agricultural exports to increase threefold through the Gratieks program. To support this program, various policies have been made. One of them is accelerating agricultural exports by facilitating exporter services, including simplifying the inspection of the shipment process. The program also invites the millennial generation who has the characteristics of strategic thinking, inspirational, innovative, energetic, enthusiastic, and fluent in adopting digital technology in various aspects of business, so that it is predicted to become carriers of innovation in agricultural development (MoA, 2019).

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