RURAL ECONOMIC DEVELOPMENT IN INDONESIA: IMPLEMENTATION OF RURAL AGRIBUSINESS DEVELOPMENT PROGRAM AND ITS EVALUATION IN EAST JAVA

Sustainable and successful rural development must consider in parallel the development of other contributing sectors. An analysis of farmers' household income indicates that the contribution agricultural activities make to the household budget is often less than 50%, although households are engaged for most of their time in agri-cultural activities. The Rural Agribusiness Development (RAD) program, which began in 2008, is one of the Indonesian government's key strategies to help poor people using a new paradigm of agricultural development. To accelerate the development of the RAD Program, it is necessary to: (1) prioritize the development of rural economic activities for poor farmers in rural areas through improving human resources; (2) provide capital assistance grants to farmers, farm labourers and farm households; and (3) assist in the transfer of production and marketing technology to add value. The achievement of the RAD objectives is highly dependent on the cooperation and commitment of all relevant stakeholders from the early stages of preparation, imple¬mentation and support from both central and local government levels. However, budgetary constraints within the support organizations has led to inefficiencies.