Economic Impact of Land Use Change on Rice Paddy Farmers
in Palembang City Indonesia
NILA YULIANTINA1 , ANDY MULYANA2 , ELISA WILDAYANA2, ANDRIES LIONARDO3
1Environmental Science Doctoral Program,
Sriwijaya University,
Palembang,
INDONESIA
2Agribusiness, Faculty of Agriculture,
Sriwijaya University,
Palembang City,
INDONESIA
3Faculty of Social and Political Sciences,
Sriwijaya University,
Palembang City,
INDONESIA
Abstract: - Agricultural land conversion has the potential to have complex economic impacts on communities
and related sectors. This change can alter income patterns and cause a decrease in welfare for farmers and
business actors related to agriculture. This study aims to analyze the economic impact of land conversion on
rice farmers in lebak rice fields in Palembang City. The research location was purposively chosen, by taking a
sample of 250 respondents who were divided into two, namely farmers who changed land use and those who
did not change land use. Economic impact analysis is looking at farmers' income before and after land
conversion in the last 5 years interval, 2019-2023. The results showed that there was a difference in farmers'
rice farming income before and after land conversion obtaining a tcount value of -5,450, significant at the 0.01
confidence level (0.000 <0.01). The economic impact of land conversion on rice farmers is in the form of a
decrease in rice farming income.
Key-Words: - Land conversion, economic impact, farming, paddy fields, decline, income, agriculture.
Received: April 13, 2024. Revised: September 5, 2024. Accepted: October 5, 2024. Published: November 5, 2024.
1 Introduction
Indonesia is an agricultural country with one of its
main incomes from the agricultural sector, [1].
Which means that the agricultural sector plays an
important role in the national economy, which can
be seen from the large number of people or laborers
who work in the agricultural sector or from products
originating from the agricultural sector. The
characteristics of Indonesia are a tropical climate [2]
and fertile soil, which makes Indonesia suitable for
planting various crops such as food crops and
plantation crops . Land is one of the resources that
cannot be produced, causing availability to be
limited, due to the high demand for land causing
land to be limited, [3]. Indonesia's agricultural land
area in 2016-2018, is divided into non-field
agricultural land and paddy fields. The area of non-
field agriculture in 2016 was 28,555,790 hectares,
followed by 29,121,269 hectares in 2017, and
27,724,917 hectares in 2018, [4]. Based on these
data, in the last three years, namely 2016-2018, the
area of non-field agricultural land has decreased and
in 2018 occupied the smallest area compared to the
previous two years. While the area of rice fields in
2016-2018, 2016 amounted to 8,187,734 hectares,
then in 2017 rice fields amounted to 8,164,045
hectares, and in 2018 rice fields amounted to
7,105,145 hectares, [4]. The data shows a decrease
in the amount of paddy fields in the last three years.
The implications of uncontrolled conversion of
agricultural land as the population increases can
threaten the reduced food supply capacity, now
many agricultural lands are converted into
residential land or residential settlements, therefore
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the increase in population is what is felt as if the
land becomes narrow, becomes little, while demand
is always increasing. This is in line with research
results [5] which show that the population variable
is an external variable that has a positive and
significant effect on land conversion.The increase in
population also affects the need for built-up land,
one of which is housing development, while the
amount of land area is fixed or does not increase.
High population growth is caused by natural
population growth and the impact of urbanization
factors. In line with the increase in population and
high economic growth, the need for land continues
to increase. Residents choose safe areas, namely
areas far from the sea and close to cities as their
place of residence so that there is agricultural land
that can be converted into residential land, [6]. This
is consistent with the resultsresearch in 2019 on the
conversion of agricultural land in Pekalongan,
Central Java, which shows that the trend of
agricultural land conversion in Pekalongan City is
positive, so there is a tendency for agricultural land
conversion to increase from year to year, [7].
Other impacts that occur due to the conversion
of agricultural land include an increase in poverty so
that slums also increase. Economic growth causes a
decrease in environmental quality. The effects of
land conversion lead to many dimensions. The
negative impact of changing the function of rice
fields does not only reduce agricultural production,
but also has an impact on the socio-economic
conditions of the community and the environment
around the area concerned. In certain cases,
conversion of rice fields cannot be avoided. negative
impact on socio-economic aspects such as changes
in land ownership, employment opportunities,
changes in work patterns, [8].
By the designation contained in the RTRW
(Regional Spatial Plan), land conversion occurs due
to government policies or regulatory aspects issued
by the government. The increase in urban growth
will cause various kinds of problems and bring
consequences in all aspects of life, the development
of housing and residential areas in Palembang City
is currently focused on the suburbs. There is a lot of
housing development that was originally used as
agricultural land, which is now being converted by
developers to become housing and residential areas.
Efforts to protect agricultural land carried out by the
government have been stipulated in Law Number 41
of 2009 concerning the Protection of Sustainable
Food Agricultural Land, [9].
Palembang City is the capital city of South
Sumatra which has a lot of agricultural land,
especially rice fields, but over time the rice fields in
Palembang City began to decrease. Based on data
from the Palembang City Agriculture and Food
Security Office, the standard area of paddy fields in
Palembang City 2017-2021 in 2017 was 5,938
hectares (ha), followed by 2018 there were 4,582 ha,
there was a decrease of 0.04%. 2019 has an area of
4,462.60 ha, which has decreased from the previous
year by 0.29%, and in 2020 it decreased by 0.20%
of the land area to 3,661.31 ha. Based on the data in
Table 1, there is a reduction in paddy fields that
occurs every year. Factors triggering the reduction
of paddy fields may be due to the conversion of
paddy fields that occur in Palembang City.
Table 1. Size of Rice Paddy Fields in Palembang
City (km)
No
District
The standard area of wet rice paddies
2019
2020
2021
2022
2023
1
Ilir Barat I
12,3
12,6
12,5
12,7
17,7
2
Ilir Barat II
10,3
12,1
10,5
10,6
10,0
3
Gandus
1.129,4
911,1
867,6
620,3
505,7
4
Seberang Ulu I
38,7
14,5
14,5
14,5
13,7
5
Kertapati
1.916,7
2.165,5
1.581,0
1558,0
1638,3
6
Seberang Ulu II
4,8
6,7
4,0
5,0
16,0
7
Kalidoni
817,2
682,2
741,0
741,5
543,8
8
Plaju
361,9
307,2
328,0
304,0
329,4
9
Ilir Timur II
31
31,0
32,0
32,0
26,8
10
Sematang Borang
140,3
116,1
70,0
85,0
0,0
11
Jakabaring
0,0
0,0
0,0
25,5
51,1
Total
4.462,6
4.259,0
3.661,1
3.409,0
3.152,4
Source: Agriculture and Food Security Office of Palembang
City, 2023
The area of wetland rice paddies in Palembang
City has experienced a reduction in land area every
year from 2019 to 2023 as shown in Table 1. Table
1 shows that the area of wetland rice fields in
Palembang City decreased every year during that
period. The decrease that occurred in each year was
also different, with the smallest decrease occurring
in 2023 which amounted to 3.132,4 km, and the
largest decrease occurred in 2019 which amounted
to 4.462,6 km, the average decrease that occurred
during the period from 2019 to 2024 was 3.788,82
km. The conversion of rice field area in each sub-
district in the 2017-2021 period can be seen in
Figure 1.
Figure 1 shows the graph of changes in the total
area of rice fields in Palembang City. It is known
that the three largest areas have the largest rice
fields in Palembang City, namely Kertapati District,
Gandus District, and Kalidoni District, it can be
seen the dynamics of changes in the area of rice
fields in 2017-2020 due to land conversion. In this
case, a transparent conversion process, fair
compensation, as well as effective and targeted
government with business strategies are needed to
prevent farmers from falling into poverty, [10].
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Fig. 1: Graph of Land Use Change of Rice Field in
Palembang City
Source: Agriculture and Food Security Office of Pelembang
City, 2023
Research on land conversion is important, given
that it is a significant and relevant issue in the
context of urbanization and economic development.
Previously, similar research has been conducted on
this topic, but there is a novelty or difference with
previous research in this study in terms of
commodities and also the allocation of research. The
research on the economic impact of land conversion
on Paddy crops has been conducted by [6]; oil palm
plantations by [11] there are also those that discuss
the impact on agriculture in general as conducted by
[8], [12], [13]. The choice of location in this study
is also another novelty because previously similar
studies have also been conducted on the impact of
land use change in several other locations such as
those conducted in Sleman Regency by [5]; in Aceh
Besar District Province by [6]; and in South
Sumatra Province by [13] This research raises topics
that are relevant to current conditions, namely
related to the increasing population. Also, the
selection of locations and commodities are analyzed
by raising this topic
As a result of this land conversion, many
farmers whose livelihoods have changed or
switched professions have become business owners
(owning boarding houses, stalls, etc.), and some
have become factory workers or motorcycle taxi
drivers. This will affect changes in rice production
and farmers' income, which will affect food
security. Land conversion will impact the
community, especially rice farmers, so it is
necessary to conduct research to analyze the
economic impact of land conversion on rice farmers.
2 Research Methods
This research uses quantitative methods, analytical
quantitative research is conducted to accept or reject
hypotheses that are described by significance
values. In qualitative research by conducting
interviews, data collectors have prepared research
instruments in the form of written questions whose
alternative answers have also been prepared. aims to
analyze in depth the opinions of policymakers
regarding land conversion of community leaders and
representatives, farmers who know the occurrence
of land conversion in Palembang City.
This research is planned for the implementation
of research conducted in early May 2023 until
completion. Researchers determined the research
location by the research theme and by the
formulation of research problems. By these
provisions, the location of this research took place
in the Palembang City government. Palembang City
is a metropolitan city that also has agricultural land
around it so the right area for land conversion to
non-agriculture which is the target of this research is
the Palembang City Development Planning Agency
and the Palembang City Agriculture and Food
Security Office. This research location was chosen
with consideration of the researcher's assumption of
the reality that might appear in the field with the
existing reality administratively. The complete
research location map can be seen in Figure 2.
The methodology employed in this study
involves the Disproportionate Stratified Random
Sampling technique, also known as proportional
stratified random sampling. In practical scenarios,
populations often exhibit heterogeneity, meaning
there are significant differences between various
segments within the population. The degree of
heterogeneity directly impacts the effectiveness and
precision of sampling methods. To accurately
capture the characteristics of a heterogeneous
population, it is divided into distinct and uniform
layers, known as strata, from which random samples
are drawn. In a proportionally stratified random
sample, the chances of selection from one stratum to
another may be equal or vary. The selection process
aims to ensure representation from each layer,
allowing for a more comprehensive understanding
of the population's characteristics.
Two conditions must be met to use the
proportional stratified random sampling method,
namely
(a) There are clear criteria that will be used as a
basis for stratifying the population,
(b) The exact number of elementary units of each
layer in the population is known.
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Fig. 2: Location Distribution Map of Rice Paddy Fields in Palembang City
Table 2. Number of Farmers in Three Districts in Palembang City
District
Land
Area
(Ha)
Jiwa
Farmer Population
Sampling
Tenant Farmers
Owners Farmers
Tenant Farmers
Owners Farmers
No land
conversion
land
conver
sion
No land
conversion
land
conver
sion
No land
conversion
land
conver
sion
No land
conversion
land
conver
sion
Kalidoni
650
466
236
19
171
11
23
11
22
16
Gandus
581
958
450
151
267
90
23
21
23
20
Kertapati
1558
1132
187
497
192
268
22
24
22
23
Source: Agriculture and Food Security Office of Palembang City, 2023
The size of the sample taken from each stratum
can be balanced and can also be unbalanced. In
balanced sampling, the unit elements taken from
each stratum are directly proportional to the number
of elementary units in the stratum concerned. If the
researcher uses the unbalanced method, then he can
determine the number of sample elements he will
take himself.
In the selection of the research place, this
research was conducted in three sub-districts in
Palembang City in the selection of several sub-
districts this was done with consideration of the
most rice fields and also the most cases of
conversion in Palembang City which are Kertapati,
Kalidoni, and Gandus. This research was first
conducted by a pre-research survey, for the results
of the survey can be seen in Table 2 which is based
on data from the agriculture office and has been
done a survey.
The formula used to determine the number of
informant samples using the Slovin or
Yamaneformula is [14]:
n :
(1)
Description:
n: Sample size
N: Population Size (Number of farmers)
e: Acceptable error (20%).
The total land area and farmer population in
Kalidoni Sub-district, Gandus Sub-district, and
Kertapati Sub-district be seen in Table 2.
Table 2, shows the number of samples in this
study totaling 250 respondents. The sample was
taken from three different areas, namely Kalidoni
Subdistrict, Gandus Subdistrict and Kertapati
Subdistrict. The sample was subdivided into land-
use change farmers and non-land-use change
farmers who were then subdivided into two
categories, namely some as tenants and some as
owners and tenants. Details of the sample
distribution in each region are Kalidoni Sub-district
cultivators: 11 not converted, 23 converted, and
tenants/owners: 16 not converted, 22 converted.
Gandus Sub-district area: tenants: 23 non-diversion,
21 land conversion and tenant/owner samples: 23 no
land conversion, 20 land conversion. Kertapati sub-
district owners: 22 who did not convert, 24 who did,
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and tenants/owners: 22 who did not convert, 23 who
did.
To answer the problems in this study, data or
information is needed using data collection
techniques. In quantitative research, validation and
reliability tests were carried out on the
questionnaires to be used in Phase One and Phase
Two. Researchers use triangulation data collection
techniques for qualitative methods. Triangulation is
a data processing technique that involves analyzing
results using multiple methods of data collection to
enhance validity, create a more comprehensive
understanding, and examine different perspectives
on a research problem [15], to make it easier
researchers will divide the type of data into two:
a. Primary data
Primary data is data that is directly on the source of
information obtained through in-depth interviews.
An in-depth interview is a process of obtaining
information for research puIDR oses using question
and answer. Field observations, researchers will
make observations in the field by systematically
recording the phenomena and symptoms that take
place in the social processes that occur in the field to
collect qualitative data measured indirectly in the
form of attitudes, behaviors, and activities.
b. Secondary Data
Secondary data is data collection carried out
indirectly which is obtained to complement primary
data using:
1) Literature study, namely data collection
techniques by examining books, magazines,
research journals, or other writings to strengthen
theoretical considerations relevant to the problem
to be studied.
2) Documentation study, namely data collection
obtained by examining written records, both
from documents and archives concerning the
problem under study.
A sampling of farmers who have the potential to
change the function of paddy fields using in-depth
interview techniques with the guidance of
questionnaires distributed. The selection of
respondents was determined by cluster-stratified
random sampling to fulfill the representation of
each observation area. Respondents were selected
from farmers who own paddy fields from three sub-
districts in Palembang City. In taking primary data
samples, purosive sampling is a non-random
sampling method (intentionally). Purposive
sampling can be thought of as a subset of
convenience sampling, in that respondents are
chosen subjectively [16] then continued using
stratified random sampling in practice often
encountered populations that are not homogeneous.
The more heterogeneous a population is, the greater
the difference in properties between these layers of
sampling methods, among others influenced by the
degree of uniformity of the population,. The basis
for consideration in determining respondents,
namely:
1. Availability of informants to be used as
respondents
2. Has a reputation, position, or position that has
shown credibility as an expert or expert in his
field
3. Has experience in his field.
By the research objectives, after the data is
collected, the next process is to simplify the data
obtained into a form that is easy to read, understand,
and inteIDR ret which is essentially an effort to find
answers to existing problems. Therefore, the data
obtained will then be analyzed qualitatively. This
means that the existing data is analyzed as detailed
as possible by carefully abstracting any information
obtained in the field so that it is hoped that adequate
conclusions can be obtained.
The economic impact that occurs as a result of
the conversion of agricultural land in Palembang
City using the respondent interview method using a
questionnaire. The results of the interviews will be
analyzed and described using primary and
secondary data. The economic impact is to see the
income of farmers before and after land conversion
in the last 5 years interval, namely 2017-2021, the
formula for analyzing farmer income using the data
analysis design carried out in this study, among
others:
a) Cost Analysis
According to [17], to calculate the amount of
total cost (Total Cost) obtained by summing up
fixed costs (FC) with variable costs (Variable
Cost) with the formula:
(2)
Where
TC = Total Cost (IDR/Hectare)
FC = Fixed Cost (IDR/Hectare)
VC = Variable Cost (IDR/Hectare)
IDR= Indonesian Rupiah
b) Revenue Analysis
In general, the calculation of total revenue (TR)
is the multiplication of the amount of production
(Y) by the selling price (Py) and is stated by the
following formula:
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(3)
Where
TR = Total Revenue (IDR/Hectare)
Py = Produk Price (IDR/Hectare)
Y = Production Quantity
c) Income Analysis
Income is the difference between revenue (TR)
and total costs (TC) and is expressed by the
formula, [18] :
(4)
Where :
I = Income (IDR/Hectare)
TR= Total Revenue (IDR/Hectare)
TC= Total Cost (IDR/Hectare)
Then the paired sample t-test analysis is used to
determine whether there is a difference in the
average value between two groups of data that are
paired. Paired here means that one sample gets a
different treatment from the time dimension. The
paired samples t-test is a statistical method used to
compare the means of two related groups or a single
group measured at different times, [19]. If the
results of the calculation of changes in income
before and after the land conversion show a minus
value, it means that changes in income that occur at
the household level show that household income has
decreased. Conversely, if the value shows a plus
value, household income has increased. Previous
research shows that the decrease in land area due to
land conversion is followed by a decrease in
productivity and income from agriculture, [20].
3 Results and Discussion
3.1 General Situation of the Research
Location
This research was conducted in three sub-districts in
Palembang City whose land was converted from
wetland rice fields to non-agricultural land. The
three locations were Kalidoni Subdistrict, Gandus
Subdistrict, and Kertapati Subdistrict. The three sub-
districts have similar characteristics because they
are located in the same city. Rainfall, air
temperature, customs, and geographical conditions
in the area are almost the same. The geographical
conditions in the three sub-districts are still a lot of
wetland rice fields which are the source of
livelihood for the community.
Geographically Palembang City is located
between 2052' to 305' South latitude and 104037' to
104052' East longitude with an average altitude of
8m above sea level. Palembang City is the capital of
South Sumatra Province and also the largest city and
the center of socio-economic activities in the South
Sumatra region. The area of Palembang City is
400.61 km2 or 40,061 hectare which is
administratively divided into 16 sub-districts and
107 villages Administratively Palembang City is
bordered by:
North: Banyuasin Regency
East side: Banyuasin Regency
West side: Banyuasin Regency
South: Ogan Ilir and Muara Enim Regency
The administrative area of Palembang City can
be seen in Figure 3. The location of Palembang city
is quite strategic because it is traversed by the
Sumatra Island crossroad that connects between
regions on the island of Sumatra. There is also Musi
River which functions as a trade transportation
between regions and is a Water City.
The topography of Palembang City, in general,
is lowland with an average height of +4 ± 12 meters
above sea level, with a composition: 48% of the
land is not flooded, 15% of the land is seasonally
flooded and 35% of the land is continuously flooded
throughout the season. The location of the highest
area is in Bukit Seguntang, Ilir Barat I Sub-district,
with an altitude of about 10 meters above sea level.
The lowest area is located in the Sungai Lais area,
Ilir Timur II Subdistrict. The city of Palembang can
be divided into areas with flat to gentle topography,
with slopes ranging from ± 0 - 3o and areas with
undulating topography with slopes ranging from ± 2
± 10o.
There are differences in topographic character
between Seberang Ulu and Seberang Ilir. Seberang
Ulu area generally has a relatively flat topography
and most of the original land is below the maximum
tide level of the Musi River (± 3.75m above sea
level) except for the lands that have been built and
will be built where the land surface has been filled
and reclaimed. In the Seberang Ilir area, there are
variations in topography (elevation) from 4 m to 20
m above sea level and there are micro-uses and
valleys that are “continuous” with steep topography.
Thus from the topographic aspect in principle, there
are no limiting factors for spatial development,
either in the form of slopes or large slopes. The
majority of Palembang City is a gentle lowland with
an average land elevation of +12 meters above sea
level, while undulating areas are found in several
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places such as Kenten, Bukit Sangkal, Bukit
Siguntang and Talang Buluh-Gandus.
Fig. 3: Administrative map of Palembang City
There are differences in the topographic
character of Palembang City (Seberang Ulu and
Seberang Ilir) related to hydrological conditions, in
the form of tributaries in the region. In the Seberang
Ulu area, there are relatively large tributaries with
estuaries in the Musi River.
The relatively large tributaries of the Musi River
that have their headwaters in the Bukit Barisan
Mountains are the Ogan River and the Komering
River. The relatively small tributary of the Musi
River are the Keramasan River which has its
headwaters in the Muara Enim Regency. In addition
to these tributaries, there are also small and short
tributaries that drain into the Musi River and have
their headwaters in Palembang City and surrounding
areas, such as the Aur River and Sriguna River. In
the Seberang Ilir area, the flow of the tributaries is
divided into 2 (two) according to the existing
topographic characteristics, in the form of a
topographic ridge. In the southern part of the ridge,
some tributaries flow to the Musi River and
upstream on the topographic ridge. These tributaries
include the Lambidaro, Sekanak, Buah, Batang,
Selincah, and others. In the northern part of the
ridge, tributaries are flowing north, which empty
into the Kenten River, among others.
3.2 Characteristics of Respondents
Respondent farmers in this study were selected with
the criteria that the agricultural land they own is
included in the Palembang City area in 3 sub-
districts, namely 72 respondents in Kalidoni sub-
district, 87 respondents in Gandus sub-district and
91 respondents in Kertapati sub-district consisting
of farmers who own and cultivate land which is
divided into 2, namely farmers who transfer land
functions and farmers who do not transfer land
functions and tenant farmers which is divided into 2,
namely farmers who transfer land functions and
farmers who do not transfer land functions. Farmers
who fall into these criteria are then randomly
selected. The characteristics of respondents in this
study are discussed by grouping respondents into
several categories, namely age level, education
level, number of dependents, and income level.
Thus, the majority of farmers who are landowners
are male.
3.2.1 Age Levels
Age level of respondent farmers in three sub-
districts (Kertapati, Gandus, Kalidoni) in Palembang
City. The majority of farmer respondents are in the
age range of 52-57 years and 58-63 years with a
percentage of 45 percent. Judging from the highest
percentage of farmers aged in the age range of 52-
63 years means that the age of farmer respondents is
in the old working age category. Farmers at working
age are 40-45 years and 46-51 years with a
percentage of 26 percent. The lowest percentage of
farmers in the age range of 28-33 years and 76-81
years is 3 percent each. The level of age comparison
of respondents can be seen in Figure 4.
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Fig. 4: Characteristics of Respondents by Age
3.2.2 Level of Education
Farmers in Palembang City generally have a low
level of education. The education level of
respondent farmers in the three sub-districts
(Kertapati, Gandus, Kalidoni) in Palembang City
has not graduated from school and only reached
elementary school, junior high school, and senior
high school. This is because in the past the
obligation to study only up to six years, namely
reaching the elementary level or equivalent. The
education of farmers who are respondents in the
three sub-districts of Palembang City is mostly low,
namely only reaching elementary school, which is
62 percent, while the rest are junior high school at
17 percent, high school at 12 percent and not
finishing school at 10 percent. The level of
education will help shape the mindset and
perception of farmers, also related to the ability of
farmers to accept and desire to seek information
about the technologies needed to support their
farms. The full education level can be seen in Figure
5.
Fig. 5: Education Level of Respondents
3.2.3 Land Area and Ownership Status
The size of cultivated land is a variable that can
indicate the scale of farming run by respondents. In
this study, land area is the only land in three sub-
districts (Kertapati, Gandus, Kalidoni) which are the
research areas. The land is categorized based on the
Central Bureau of Statistics (BPS) which is the
minimum land area to meet the needs of a decent
life for farmers. Small-scale farmers with a farm
size of <0.5 hectares, medium-scale farmers with a
farm size of 0.5-1 hectare, and large-scale farmers
with a farm size of >1.0 hectare were categorized.
The cultivated land area and land ownership status
of farmers who were respondents in this study are
presented in Figure 6.
Farmers' cultivated land area is around medium-
scale land (74.80%) and small-scale land (18.40%)
and the remaining 6.80 percent are farmers with
large-scale cultivated land. Judging from the area of
cultivated land owned by respondents in three sub-
districts (Kertapati, Gandus, Kalidoni) in Palembang
City area is the farming scale of medium-scale
farmers and small-scale farmers. From the area of
land owned by respondents, the profit cannot meet
the needs of a decent life. Land area is consistently
identified as a significant factor, positively
impacting income in horticultural farming [21] and
upland rice production [22].
Fig. 6: Characteristics of respondents based on: (a)
Land size, (b) Land Ownership Status
Land ownership status illustrates the existence
of landowners to keep their land as rice fields or
convert it into non-agricultural land. Land
ownership status is divided into two groups, namely:
owners and cultivators, and cultivators are then re-
divided into 4 parts, namely owners and cultivators
of land conversion, owners and cultivators not
converting land functions, cultivators of land
conversion and cultivators not converting land
functions. The distribution of land ownership can be
seen in the Figure 6. Farmers who cultivate in their
ownership status are owners and cultivators who do
not change land use (27%) while those who own
3%
9%
12%
14%
25%
20%
9%
5% 3%
28-33 Yr 34-39 Yr 40-45 Yr 46-51 Yr 52-57 Yr
58-63 Yr 64-69 Yr 70-75 Yr 76-81 Yr
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and cultivate land use change are (24%), and tenant
farmers do not change land use (27%) and tenant
farmers change land use by (22%). Tenant farmers
are relatively limited in terms of education and
capital, so they take up farming because there are no
other options for their household income.
3.2.4 Experience
The length of time farmers have been farming rice
in the swamp is an aspect that can see the
experience of farmers. Farmers who are classified as
long in farming are considered to be able to more
easily accept the innovations given and dare to make
decisions without fear of being wrong due to the
learning process from previous experiences. The
length of farming here is divided into three
categories based on the highest and lowest values of
the respondents, namely low (<10 years), medium
(10-20 years), and high (>20 years). The distribution
of farmers based on the length of farming can be
seen in Figure 7.
Fig. 7: Respondent characteristics based on
experience
Figure 7, it can be seen that the distribution of
farmers with the highest number in order is high
experience (63%), medium (32%), and low (9%).
When viewed from the number of farmers who have
high experience and compared with the
medium/productive age, then rice farming has good
potential in terms of its human resources, regardless
of external factors or other internal factors.
According to Rahayu and Riptanti (2010), this
experience allows farmers to manage farming well
and manage constraints, obstacles, and opportunities
that exist.
3.2.5 Number of Dependents
Farmers in Palembang City generally have two to
three children and one wife. In this study most
respondents had two to three dependents, namely 60
percent, respondents had four to five dependents at
24 percent, respondents had 1 dependent person at
12 percent, respondents had six to seven dependents
at 3 percent and respondents had eight to nine
dependents at 1 percent. From the percentage
results, most respondents have 2 to three dependents
at 60%. The family responsibilities of respondents
in this study can be seen in Figure 8.
Fig. 8: Characteristics of respondents based on the
number of dependents
The respondent's number of family dependents
is one of the important variables in the study as it
can affect various aspects of the respondent's life,
including economic conditions, psychological well-
being, and consumer behavior. In an economic
context, a larger number of dependents tends to
increase the financial burden on the head of
household or main breadwinner. This may affect
their ability to save, invest, or allocate funds for
other needs such as education and health. Thus,
understanding the number of dependents can help
researchers in analyzing and understanding
household financial dynamics as well as the level of
poverty or economic well-being in the community.
3.3 The Impact of Agricultural Land
Conversion of Rice Fields in Lebak
Swamp
Economic impact is the indirect influence of the
object of analysis on the number and type of
economic activities in an area that focuses on
economic indicators, and changes in farmers'
income after converting wetland rice land into non-
agricultural land. The economic impact is looking at
farmers' income before and after the conversion of
land use in the last 5 years interval, namely 2017-
2021.
Operational costs in this study are all costs
incurred by farmers, both those that directly affect
the production process activities (variable costs) and
those that do not directly affect the production
process activities (fixed costs). Fixed costs are costs
that must be incurred by farmers whose use is not
exhausted in one production period. Fixed costs
were obtained in this study in the form of tools.
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Fixed costs of farmer production can be seen in
Table 3.
Based on Table 3 shows that the fixed costs that
must be incurred by farmers are only in the form of
tools, which are used by land conversion and non-
land conversion farmers, respectively calculated
based on per hectare and cultivated area. The
average fixed costs of land conversion farmers per
hectare amounted to IDR 34,321/hectare (ha) the
fixed costs of tenant owners amounted to IDR
36,130/hectare a and the fixed costs of cultivators
amounted to IDR 32,513/hectare. The average fixed
costs of land conversion farmers per cultivated area
amounted to IDR 38,275, the fixed costs of tenant
owners amounted to IDR 36,229 and the fixed costs
of cultivators amounted to IDR 40,321. So the
average fixed costs that must be incurred by land
conversion farmers is IDR 34,321/hectare or IDR
38,275..
Meanwhile, the average fixed costs of non-land
conversion farmers per hectare amounted to IDR
59,703/hectare, fixed costs of tenant owners
amounted to IDR 64,268/hectare and fixed costs of
cultivators amounted to IDR 55,139/hectare. The
average fixed costs of non-land conversion farmers
per cultivated area amounted to IDR 32,642, the
fixed costs of tenant owners amounted to IDR
36,644 and the fixed costs of cultivators amounted
to IDR 28,640. So the average fixed cost that must
be incurred by farmers who do not convert land
function is IDR 59,703/Ha or IDR 32,642.
Variable costs are the overall costs incurred to
obtain factors of production and can change
according to the number of products to be produced
or costs that are easily exhausted in one production
period, [17]. Variable costs are costs whose total
size depends on production scale costs or costs
]incurred are used up in one production in other
words costs that cannot be used many times in the
production process. The following is the number of
variable costs incurred by land-conversion farmers
and non-land-conversion farmers during one
growing season. Variable costs in this study can be
seen in Table 4.
Based on Table 4, the variable costs of land
conversion for farmers in farming consist of land
rent, seeds, fertilizers, wages and equipment rent,
and transportation. The variable average cost of land
rent is IDR 848,831/Ha or IDR 668,304, the
variable average cost of seeds is IDR 384,457/Ha or
per cultivated area of IDR 244,040, the variable
average cost of fertilizer is IDR 455,490/Ha or per
cultivated area of IDR 279,734, the variable
average cost of wages and equipment rental is IDR
2,124,325/Ha or per cultivated area of IDR
1,361,336 and the variable average cost of
transportation is IDR 111,210/Ha or per cultivated
area of IDR 64,968.
Therefore, the average variable cost of farmers
switching functions is IDR 3,987,456/ha or per
cultivated area of IDR 2,665,882. The amount of
variable costs of transferring the function of rice
cultivator owners is per hectare of IDR 2,775,989/ha
and cultivated area of IDR 1,653,729, while the
amount of variable costs of transferring the function
of rice cultivators is per hectare of IDR
5,198,923/ha and cultivated area of IDR 3,678,036.
Variable costs for Non-land use farmers can be seen
in Table 5.
Based on Table 5, the variable costs of non-land
conversion farmers in farming consist of land rent,
seeds, fertilizers, wages and equipment rent, water,
taxes, and transportation. The average variable cost
of land rent is IDR 1,194,350/Ha or IDR
407,353/cultivated area, the average variable cost of
seeds is IDR 286,564/Ha or IDR 195,030/cultivated
area, the average variable cost of fertilizer is IDR
371,425/Ha or IDR 265,391/cultivated area, the
average variable cost of wages and equipment rental
is IDR 1. 717,678/Ha or IDR 1,292,888, the average
variable cost of water is IDR 76/Ha or IDR
10,000/acre, the average variable cost of taxes is
IDR 3,295/Ha or IDR 117,500/acre, and the average
variable cost of transport is IDR 63,225/Ha or IDR
45,160/acre.
Thus, the average variable cost of non-
transferring farmers is IDR 3,039,438/Ha or per
cultivated area of IDR 2,333,322. The amount of
variable costs of non-land conversion of rice
cultivator owners is per hectare of IDR
3,876,531/Ha and cultivated area of IDR 3,173,409,
while the amount of variable costs of non-land
conversion of rice cultivators is per hectare of IDR
2,202,345/Ha and cultivated area of IDR 1,493,235.
The variable costs of non-land conversion farmers
are smaller than the variable costs of land
conversion farmers, although in non-land
conversion farmers there are additional variable
costs in the form of water and taxes.
This difference can occur due to different types
of costs incurred in the farming business. Total
production costs are the sum of fixed costs and
variable costs. Production costs for land conversion
farmers can be seen in Table 6.
Table 6, shows that the costs incurred by the
farmer's transfer function of tenant owners and rice
cultivators are each divided into two costs, namely
fixed costs and variable costs.
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Table 3. Farmers' fixed costs in the planting season
No
Fixed Cost Type
Fixed Cost/Hectare
(IDR/acreage /Growing season)
Fixed Cost/ cultivated area
(IDR/acreage/planting season)
Owners
Workers
Average
Owners
Workers
Average
1
Farmer Tool Costs for Land
Conversion
36.130
32.513
34.321
36.229
40.321
38.275
2
Tool Costs Non-Land Use
Farmers
64.268
55.139
59.703
36.644
28.640
32.642
Table 4. Farmer Variable Costs of Land Conversion
No
Variable Cost Type
Variable Cost/Hectare
(IDR/acreage /Growing season)
Variable Costs (IDR/acreage/planting
season)
Owners
Workers
Average
Owners
Workers
Average
1.
Land rent
0
1.697.662
848.831
-
1.336.607
668.304
2.
Seedlings
369.859
399.056
384.457
210.847
277.232
244.040
3.
fertilizer
423.037
487.943
455.490
234.915
324.554
279.734
4.
Pesticides
64.251
62.035
63.143
50.000
45.000
47.500
5.
wages and tool rental
1.772.571
2.476.080
2.124.325
1.076.780
1.645.893
1.361.336
6.
Water
-
-
-
-
-
-
7.
Tax
-
-
-
-
-
-
8.
transportation
146.271
76.148
111.210
81.186
48.750
64.968
Jumlah
2.775.989
5.198.923
3.987.456
1.653.729
3.678.036
2.665.882
Table 5. Variable Costs of Non-Conversion Farmers
No
Variable Cost Type
Variable Cost/Hectare
(IDR /Ha/Growing season)
Variable Costs
(IDR/acreage/planting season)
Owners
Workers
Average
Owners
Workers
Average
1.
Land rent
-
1.194.350
1.194.350
-
814.706
407.353
2.
Seedlings
451.108
122.020
286.564
307.045
83.015
195.030
3.
fertilizer
495.528
158.005
326.767
368.305
99.559
233.932
4
Pesticides
65.690
23.627
44.658
48.286
14.632
31.459
5.
wages and tool rental
2.753.203
682.154
1.717.678
2.116.364
469.412
1.292.888
6.
Water
152
-
76
20.000
-
10.000
7.
Tax
6.591
-
3.295
235.000
-
117.500
8.
transportation
104.260
22.189
63.225
78.409
11.912
45.160
Jumlah
3.876.531
2.202.345
3.039.438
3.173.409
1.493.235
2.333.322
Table 6. Total Cost of Farmers Switching Farm Functions
No
Type of Cost
of Switching
Farm
Function
Farming Cost/Hectare
(IDR/Ha/planting season)
Farming Costs / Area Cultivated
(IDR/acreage/planting season)
Owners
WorkesPengara
Average
Owners
Workers
Average
1.
Fixed costs
36.130
32.513
34.321,5
36.229
40.321
38.275
2.
Variabel Cost
2.775.989
5.198.923
3.987.456
1.653.729
3.678.036
2.665.882
Jumlah
2.812.119
5.231.436
4.021.777,5
1.689.958
3.718.357
2.704.157
Table 7. Total Costs of Non-Convertible Farmers for one Farming Season
No
Type of Non-Function
Cost of Farming
Farming Cost/Hectare
(IDR/planting season)
Farming costs/acreage (IDR /acreage)
Owners
workers
Average
Owners
Workers
Average
1.
Fixed Costs
63.268
55.139
59.203,5
36.644
28.640
32.642
2.
Variabek Costs
3.876.531
2.202.345
3.039.438
3.173.409
1.493.235
2.333.322
Jumlah
3.940.800
2.257.483
3.098.641,5
2.962.477
1.521.875
2.365.964
The amount of costs incurred by tenant farmers
is per hectare of IDR 2,812,119/Ha and cultivated
area of IDR 1,689,957, while the amount of costs
incurred by tenant farmers is per hectare of IDR
5,231,436/Ha and cultivated area of IDR 3,718,357.
So the average cost incurred by farmers' transfer
function is per hectare of IDR 4,021,777.5/Ha and
area of cultivation of IDR 2,704,157. The total
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production costs of non-land conversion farmers can
be seen in Table 7.
Table 7, shows that the costs incurred by
farmers' non-transfer function of tenant owners and
rice cultivators are each divided into two costs,
namely fixed costs and variable costs. The number
of costs incurred by farmers' non-transfer function
of rice cultivator owners is per hectare of IDR
3,940,800/Ha and cultivated area of IDR 2,962,477,
while the amount of costs incurred by farmers non-
transfer function of rice cultivators is per hectare of
IDR 2,257,483/Ha and cultivated area of IDR
1,521,875. So the average costs incurred by farmers
transfer function is per hectare of IDR
3,098,641.5/Ha and the area of cultivation amounted
to IDR 2,365,964.
Analysis of farm income is the multiplication of
production obtained by the selling price. Farmers'
income in this study is divided into two categories,
namely land conversion farmers and non-land
conversion farmers. The revenue obtained is the
average revenue from the owner of the cultivator
and the cultivator. A comparison between the
acceptance of land conversion and non-land
conversion farmers can be seen in Table 8.
Table 8. Revenue of Non-Switch Farmers Farming
Function One Farming Season
No
Farmer
Revenue
Revenue (IDR
/ha/planting season)
Revenue / Acreage
(IDR / Planting
Season)
1.
Farmer
Acceptance
of Land
Conversion
19.830.562
14.412.557
2.
Non-land
conversion
farmer
revenue
20.557.442
16.144.992
Based on Table 8, it can be seen that the
acceptance of land conversion farmers is per hectare
of IDR 19,830,562/Ha and cultivated area of IDR
14,412,557. At the same time, the acceptance of
non-land conversion farmers is per hectare of IDR
20,557,442/Ha and cultivated area of IDR
16,144,992. This shows that the acceptance of land-
conversion farmers is smaller than the acceptance of
non-land-conversion farmers. This difference in
income due to land conversion is also evident from
the results of research, [6].
Income analysis is used to determine total
revenue and net income, which means gross income
or total revenue minus total costs, [17] . Farmers'
income is known to be divided into two, namely
gross income and net income. Gross income is the
value of production received by farmers before
deducting production costs, while net income is the
value of production received by farmers minus
production costs during the production process.
Calculation of income is also divided into two
categories as in the analysis of acceptance, more
details about the income of farmers can be seen in
Table 9.
Table 9. Comparison of Farmers' Farm Income from
Land Use Change and Non-use Change in One
Planting Season
No
Farmer
Revenue
Revenue (IDR /ha/
planting season)
Revenue /
Acreage
Farmer Land Conversion
Revenue
19.830.562
14.412.557
Cost
4.021.777
2.704.157
Income
15.808.785
11.708.400
Non-land conversion farmers
Revenue
20.557.442
16.144.992
Cost
3.099.142
2.242.176
Income
17.458.300
13.902.816
Table 9 shows that there is a difference between
the income received by land-conversion and non-
land-conversion farmers. It can be seen that the
income of land conversion farmers per hectare of
farming is IDR 15,808,785/Ha and per cultivated
area of IDR 11,708,399. At the same time, the
income of farmers who do not change the function
of farmland per hectare is IDR 17,458,300 / ha and
per cultivated area of IDR 13,902,816. This shows
that the income of land-conversion farmers is
smaller than the income of non-land-conversion
farmers. This shows that there has been a change in
farming conditions due to changes in one of the
factors of production in the form of land.
Land conversion can have a significant impact
on income, with a decrease in agricultural income
but an increase in off-farm income, [23]. This result
is supported again by the results of research by [24]
showing that land conversion has a negative and
significant influence on the income of affected
farmer households. The decline in farmer household
income in the 5 villages in Temon sub-district is
partly due to the reduction of agricultural land.
Land conversion from agriculture to non-
agriculture, such as housing, industry, or
infrastructure development, can directly reduce
farmers' income as land previously used for farming
becomes unavailable. When farmers lose access to
their farmland, they also lose the main source of
income from selling crops. For example, rice
farmers who no longer have land to grow rice will
lose the income previously earned from selling rice.
This land conversion may force farmers to seek
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alternative employment that may not be comparable
in terms of income, skills, and job stability.
Land conversion is often accompanied by an
increase in land prices and the cost of living around
the developed area. Affected farmers may find that
they cannot afford to buy or rent new land at higher
prices, or that available replacement land is not as
productive as their original land. This can lead to
reduced productivity and efficiency in their farming
practices, further reducing their income. Even if
there is financial compensation from the
government or developers, it is often insufficient to
cover the long-term losses that result from the loss
of agricultural land. As a result, farmers may face
prolonged economic hardship, which can negatively
impact their well-being and that of their families.
These changes are also experienced by salted
anchovy processors who experience changes in their
production factors, more fully in the sensitivity
simulations conducted in research, [25]. The
simulation of changes in production factors has an
impact on the condition of the processing business.
Land conversion, particularly from agricultural
to non-agricultural use, has significant socio-
economic impacts in developing countries. While it
can lead to increased income for some farmers, [26],
it often results in negative economic consequences,
such as endangering household revenue, [27]. The
difference in income of land conversion and non-
land conversion farmers was analyzed using an
independent t-test. The results of the analysis
showed that there was no significant difference
between rice farming income of land conversion and
non-land conversion farmers, seen from the
significant value of 0.159, non-significant at the
0.05 confidence level (0.159 > 0.05). It can be
concluded that there is no difference between rice
farming income of land conversion and non-land
conversion farmers. Analysis of income differences
using an independent t-test can be seen in Table 10.
Table 10. Analysis of Differences in Farmer Income
Using the t Test
No
Income Differences
t hitung
Sig (2-tailed)
1
Farmers before and after
conversion
-5,450
0,000**
2
Change of Function and Non-
Change of Function Farmers
-1,435
0,159
Note: ** significant at the 0,01 level (2-tailed).
A paired t-test was used to analyze the
difference in farmers' income before and after land
conversion. A significant difference in farmers'
income from rice farming before and after land
conversion was revealed by the analysis, with a t-
count value of -5,450. This difference was
significant at the 0.01 confidence level (0.000
<0.01). Farmers made more money on average
before land conversion than they did after it. Table
10 illustrates how farmers' average incomes before
and after land conversion differed from one another.
This is consistent with research findings that show
there are differences in rice farmers' income due to
land conversion [6]. The study's findings [12],
which indicated that all respondents' farm income
decreased following land conversion, corroborate
this conclusion.
In addition to having advantages when
compared to similar studies, research must also have
disadvantages. This research only discusses the
impact of land conversion from an economic point
of view. Considering the limitations of this research
which only looks from a financial point of view, it is
hoped that future researchers will conduct more
research by analyzing research on the impact of land
conversion on various aspects such as social,
environmental, and ecosystems.
4 Conclusion
The findings of the research about the economic
impact of land conversion on rice farmers suggest
there is an association between land conversion and
farmers' economies. The analysis shows that there is
a difference in farmers' rice farming income before
and after land conversion, obtaining a count value of
-5,450, significant at the 0.01 confidence level
(0.000 <0.01). Farmers' income from land
conversion on 1 ha of land area amounted to IDR
15,808,785 and non-land conversion of IDR
17,458,300, on the average cultivated area of
respondents' income from land conversion of IDR
11,708,400 and non-land conversion of IDR
13,902,816. The average income of farmers before
land conversion is greater than farmers after land
conversion, so it can be concluded that the
economic impact of land conversion on rice farmers
is in the form of a decrease in rice farming income.
This research raises research topics closely related
to the current conditions where the population
continues to grow and will cause a reduction in
agricultural land converted for household needs.
The income difference between land conversion
farmers and non-land conversion farmers is
influenced by the reduction in the land area so that
production decreases and the greater costs required
in growing lebak swamp rice.
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WSEAS TRANSACTIONS on ENVIRONMENT and DEVELOPMENT
DOI: 10.37394/232015.2024.20.53
Nila Yuliantina, Andy Mulyana,
Elisa Wildayana, Andries Lionardo
E-ISSN: 2224-3496
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
Conceptualization: Nila Yuliantina, Andy Mulyana,
Elisa Wildayana and Andries Lionardo ardono
Data curation: Nila Yuliantina, Andy Mulyana,
Elisa Wildayana and Andries Lionardo ardono
Formal analysis: Nila Yuliantina, Andy Mulyana,
Elisa Wildayana and Andries Lionardo ardono
Investigation: Nila Yuliantina, Andy Mulyana and
Elisa Wildayana
Methodology: Nila Yuliantina, Andy Mulyana,
Elisa Wildayana And Andries Lionardo ardono
Supervision: Nila Yuliantina, Andy Mulyana
Validation: Nila Yuliantina, Andy Mulyana, Elisa
Wildayana and Andries Lionardo ardono
Writing – original draft: Nila Yuliantina, Andy
Mulyana, Elisa Wildayana and Andries Lionardo
ardono
Writing – review & editing: Nila Yuliantina, Andy
Mulyana, Elisa Wildayana and Andries Lionardo
ardono
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
No funding was received for conducting this study.
Conflict of Interest
The authors have no conflicts of interest to declare.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
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WSEAS TRANSACTIONS on ENVIRONMENT and DEVELOPMENT
DOI: 10.37394/232015.2024.20.53
Nila Yuliantina, Andy Mulyana,
Elisa Wildayana, Andries Lionardo
E-ISSN: 2224-3496
561
Volume 20, 2024
