Growth and productivity change in Indonesian agriculture, 1880-1985

By estimating output and conventional inputs, this paper examines productivity change in Indonesian agriculture since 1880. It presents a first consistent long-term estimate of total output and productivity in Indonesian agriculture, grounded on basic data and using a continuous method for the whole period. It is a first step toward improved long-term estimates of GDP in Indonesia. The main findings of the paper are that annual agricultural growth in the colonial period 1880-1940 was slightly lower than · agricultural growth in the period 1940-1980: 1.8% compared to 2.1%. In the colonial period the main generators of growth were non-rice food crops, smallholder cash crops and estate crops. In the latter period growth was concentrated on rice. Labour productivity in the densely populated area of Java increased by only 0.4% per year in the colonial period, compared to 1.2% in the period 1940-1980 in spite of a continuously slightly declining land/ labour ratio. In the postwar period there was an 1.3% annual increase in output per harvested area. This indicates a positive impact on productivity of the increased use of fertiliser and fertiliser responsive crop varieties. This paper is part of a wider study which aims at establishing the impact on Indonesian agricultural growth of public expenditure on irrigation facilities and non-conventional inputs, such as agricultural research, extension and education.