Internet Use in Agriculture and Farm Earnings: An Analysis of the Indonesia Labor Force Survey

The diffusion and adoption of the internet are necessary for farmers’ economic development, including in Indonesia where agriculture continues to employ most of the labor force. However, Indonesian farmers’ terms of trade for food crops remain low. This study examines the association between internet use in agriculture and farm earnings in Indonesia. The researchers analyzed data on the agriculture sector and three subsectors (food crops, horticulture, and livestock) from the August 2022 Indonesia National Labor Force Survey. They applied the Heckman selection model with maximum likelihood estimation to the data. 

The study finds that self-employed farmers who use the internet have 29.6% more farm earnings than those who do not. This association varies across subsectors, with internet use in the food crops and livestock subsectors associated with the lowest and highest percentage increases in farm earnings, respectively. Moreover, internet infrastructure development is low in eastern Indonesia. Therefore, addressing this issue may increase internet use and help raise farm earnings in that part of the country.

The article by Weni Lidya Sukma, Mardiana Dwi Puspitasari, and Puguh Prasetyoputra is published in the Asian Development Review Volume 42, Number 1. The journal publishes research on development issues relevant to the countries of Asia and the Pacific region, specifically members of the Asian Development Bank. Its intended audience comprises a worldwide readership of economists and other social scientists.

CONTENTS

• Introduction
• Data and Methods
• Results
• Discussion
• Conclusion