By Pierre Van Der Eng
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Additional resources for Agricultural Growth in Indonesia: Productivity Change and Policy Impact since 1880
By relating the growth of total factor input to the growth of total production, it is in principle possible to establish an unexplained rest factor, which is generally considered to be the result of a complex of interrelated factors or an indication of the contribution of 'technological change'. One general characteristic of the process of economic growth is that the contribution of technological change to growth increases during the process. It is therefore very relevant to determine the contribution of technological change to agricultural growth and to establish the components of technological change.
7 indicates that the increase during the colonial period was almost entirely due to the expansion of land productivity in the estate sector. Up to 1900 land productivity in estate production equalled the farm sector, but it rose to three times the farm sector level around 1930. The comparison of both charts indicates that since 1930 the trend in total land productivity in Java is largely explained by the trend in land productivity in the farm sector. Total land productivity in the Other Islands fell during 1880-1900.
The postwar change in total land productivity in the Other Islands was lower than in Java, mainly because the increase in the farm sector was off-set by a decline in the estate sector. Land productivity in farm agriculture in the Other Islands increased since 1900, but at a lower pace than in Java. This difference between both areas is related to the fact that the land-labour ratio continued to be relatively high in the Other Islands, whereas it declined continuously in Java. In order to at least maintain labour productivity at level, land productivity had to increase in Java.