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Agro-clusters and Rural Poverty: A Spatial Perspective for West Java

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  • Dadan Wardhana
  • Rico Ihle
  • Wim Heijman

Abstract

Neighbouring economies are likely to influence one another. The concentration of farming activities referred to as an ‘agro-cluster’ generates opportunities for income and employment in a given region and its surrounding area. We analyse the link between poverty rates and agro-clusters by accounting for spatial spillovers. To quantify agroclusters, we employ one input-oriented and one output-oriented measure. Our analysis applies six spatial econometric specifications and focuses on 545 subdistricts of West Java, where about 10% of the population live in poverty. We find that the concentration of agricultural employment substantially reduces poverty in a subdistrict as well as in neighbouring subdistricts. We also find that specialisation in crop outputs has positive impacts on poverty reduction and that localisation externalities are fundamental to agriculture's success. These findings imply that policy interventions may be applied in a spatially selective manner because they will generate spatial-spillover effects on poverty reduction in surrounding areas.

Suggested Citation

  • Dadan Wardhana & Rico Ihle & Wim Heijman, 2017. "Agro-clusters and Rural Poverty: A Spatial Perspective for West Java," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 53(2), pages 161-186, May.
    • Handle: RePEc:taf:bindes:v:53:y:2017:i:2:p:161-186
    DOI: 10.1080/00074918.2017.1298722
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    Cited by:

    1. Nugroho, Eko & Ihle, Rico & Heijman, Wim & Oosting, Simon J., 2024. "The role of forest user group membership in the extraction of teak forest resources for smallholder cattle farming," Land Use Policy, Elsevier, vol. 139(C).
    2. Renato Quiliche & Rafael Rentería-Ramos & Irineu de Brito Junior & Ana Luna & Mario Chong, 2021. "Using Spatial Patterns of COVID-19 to Build a Framework for Economic Reactivation," Sustainability, MDPI, vol. 13(18), pages 1-23, September.
    3. Ragdad Cani Miranti, 2021. "Is regional poverty converging across Indonesian districts? A distribution dynamics and spatial econometric approach," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 851-883, October.
    4. Islas-Aguirre, Juan Francisco & Venegas-Martínez, Francisco, 2024. "Interacción entre apoyos monetarios agrícolas y pobreza en los estados de mayor producción agrícola en México (2020), un enfoque de econometría espacial," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 19(40), pages 203-231, Primer se.
    5. Fatima Lambarraa-Lehnhardt & Rico Ihle & Khadija Mhaouch, 2021. "Geographical indications for supporting rural development in the context of the Green Morocco Plan: Oasis dates," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(2), pages 70-79.
    6. Mangku Purnomo & Fenna Otten & Heiko Faust, 2018. "Indonesian Traditional Market Flexibility Amidst State Promoted Market Competition," Social Sciences, MDPI, vol. 7(11), pages 1-17, November.

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