Economic Valuation of Agriculture Land Conversion and Human Driving Forces in Urban Fringe Area

Urban areas development in Indonesia has a significant impact on both the satellite towns and the urban fringe areas. Currently, the total number of urban population tends to increase. Based on World Bank’s prediction, urban population in Indonesia that previously lower than those in rural areas, will significantly increase to 132.465.25, while rural area population will increase to only 121.202.37. Natural population growth, and particularly urbanization, will significantly incur additional burdens on urban areas, especially those concerning land provisions.

The attractiveness of urban areas as the centers of social, politics, economic, and cultural activities invariably contribute to the expansion of urban areas. This was also the case with Yogyakarta. It is a city of special province that represents the centers of education, culture, and tourisms, and considered to as having lower rate of social conflict. Such conditions play decisive role in the development of this city. Without sufficient land provision, physical development of the city will creep up the agricultural land in its outskirts areas (urban sprawl phenomena).

Thus, function conversion of agricultural land in these areas is unavoidable; although this function conversion is in fact have positive impact, that is, to compensate the lack of land provision for urban area expansion. Besides, negative impacts also occur; the decrease of food-producing land for urban population and ecological degradation. The tendency toward the loss of productive land will continue to occur if there is no effort to discover the correct solution. Efforts at avoiding agricultural land conversion has been conducted by the government, for example, by providing rice fields, particularly in those islands outside Java and the formulation of constitutional regulations against the conversion of agricultural land. However, the implementations tend to be less strong and ineffective.

The activities of non-agricultural economic, either in industrial, trade, or service, in Yogyakarta will have their impact on the farmers’ attitude toward their agricultural enterprise in the outskirts areas. Such condition needs an economic valuation on the sustainability of farming to encounter urban areas expansion. The less profitable of farming enterprise might be the reason why farmers do not maintain their enterprises and change to non-agricultural sector. These might take the form of selling their rice field lands or by utilize them for non-agricultural enterprises. If farmers inclined more and more to abandon their farming enterprises, this might demonstrate that the economic values of those enterprises keep decreasing. In addition, if they intend to move to non-agricultural enterprises, they might also need to evaluate the income they will get from them, in order to determine the barometer of the attractiveness of non-agricultural enterprises in suburban areas. Thus, the conversion of agricultural lands in suburban areas might be considered as the driving forces of urban areas development.

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