Contributing 25 Percent To The Labor Force, The Agricultural Sector Should Get An Increase In KUR

Illustration. (Photo: Doc. Antara)

JAKARTA - Center for Indonesian Policy Studies (CIPS) researcher Aditya Alta revealed that the increase in the contribution of People's Business Credit (KUR) in the agricultural sector can still be increased.

"The existence of KUR helps farmers, especially in obtaining capital, in the process of cultivating land. KUR is also considered to be able to accommodate the conditions and needs of farmers because they can access loans on easy terms with relatively low interest," he said in a press statement quoted from Antara, Wednesday. July 28.

Based on data from the Central Statistics Agency (BPS) as of February 2021, it is stated that the agriculture, forestry and fishery sectors contribute 29.59 percent to the workforce. This has had an impact on the positive performance of this sector for several quarters since the onset of the COVID-19 pandemic.

BPS data shows that only the agricultural sector experienced positive growth in the third quarter of 2020, which was 2.15 percent (yoy). In the first quarter of this year, he explained, the agricultural sector returned to positive growth and experienced an increase of 2.95 percent.

"Capital assistance is one of the things that farmers need, in addition to other forms of input. In addition to KUR, relaxation of the Employment Creation Act to increase agricultural productivity also needs to be realized through investment in this sector," said Aditya.

However, he feels the government needs to review financing schemes that are more friendly to farmers. Because, he considers it is not uncommon for farmers to have difficulty getting capital from banks because they do not meet the creditworthiness (credit worthiness) which is the standard for banks in providing loans.

Furthermore, Aditya said that the difficulty of farmers getting bank credit was influenced by several things, such as insufficient assets to be used as collateral to the bank. Thus, the impact on the interest is quite high for them.

He assessed that the government should cooperate with more banks and other financial service providers to support the KUR program for farmers.

In addition, it is also said that socialization for the KUR program must be carried out regularly so that farmers know that they have a choice in determining their land management plan.

"Providing incentives to banks and financial institutions that channel KUR for farmers can also be considered," said Aditya.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that the realization of agricultural KUR until June 2021 reached IDR 42.7 trillion or 61 percent of the distribution target of IDR 70 trillion in 2021. During the 2020-2021 period, agricultural KUR distribution is said to have increased by almost 30 percent.