Governing the Conversion of Paddy Fields in Peri-Urban Areas for Food Security: The Role of Farmers’ Decisions and Land Conservation Incentives in Indonesia
This study investigates the economic and food security impacts of paddy field conversion in peri-urban Indonesia, identifying key driving factors and proposing compensation-based policy incentives derived from farmers' willingness to accept payments to mitigate land loss and ensure food self-sufficiency by 2045.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the fertile lowlands of Indonesia, a quiet but critical tension is playing out between two essential needs: the hunger for housing and industry as cities expand, and the need to keep enough land to grow the rice that feeds a nation of over 280 million people. Rice paddies are not just fields; they are the foundation of food security, the primary source of income for millions of families, and a cultural anchor for communities. When these fields are paved over for factories or homes, the loss is immediate and permanent. This process, known as land conversion, is accelerating in the "peri-urban" zones—the busy, shifting edges where the city meets the countryside. The central question for policymakers is not just how much land is being lost, but why farmers are choosing to sell, and what it would actually take to convince them to keep farming. Without a clear answer, the country risks a future where its growing population faces a shortage of its most vital food source.
A team of researchers from universities in Indonesia and Malaysia set out to understand this dynamic in Sidoarjo Regency, a district right next to the major city of Surabaya. This area is a perfect example of the pressure facing peri-urban zones, where rapid industrial and residential growth is swallowing up fertile rice fields. The researchers did not just look at maps; they went directly to the farmers. They surveyed 280 individuals who had recently sold their land or were considering it, asking deep questions about their financial struggles, their family's future, and their feelings about the changing landscape. They combined these personal stories with hard data on crop yields, production costs, and population growth to build a complete picture of what is happening on the ground and what might happen in the coming decades.
The numbers tell a stark story of loss. Over a five-year period, from 2020 to 2025, the district lost more than 5,300 hectares of rice fields. This disappearance of land translated directly into a massive drop in economic value. Before the conversion, the rice fields in the region generated a net economic value of over 2 trillion Indonesian rupiah annually. After the loss of land, that figure dropped by more than 335 billion rupiah. On a per-hectare basis, the land was worth nearly 60 million rupiah a year in rice production alone. When the researchers looked ahead, projecting current trends forward, the outlook became even more concerning. While the region currently produces enough rice to feed its people with a comfortable surplus, that surplus is shrinking fast. If the current rate of land loss continues, the district will run out of its rice surplus by 2035 and face a significant deficit of over 45 million kilograms of rice by 2040. This timing is critical, as it coincides with the peak of Indonesia's "demographic dividend," a period when the working-age population is at its largest, creating a massive surge in demand for food just as the supply is running dry.
To understand why this is happening, the researchers analyzed the forces driving farmers' decisions. They found that the choice to sell land is not made in a vacuum; it is the result of a complex mix of pressures. The strongest driver was not simply the price of the land, but a shift in employment preferences. Younger generations are increasingly unwilling to take up farming, viewing it as a job with uncertain income and low social status, preferring instead to work in the nearby factories and service sectors. This change in attitude, combined with rising production costs and the physical degradation of the land, pushes farmers toward selling. Interestingly, the study found that government policies designed to protect these fields, such as laws restricting conversion, have had very little direct effect on stopping the trend. The regulations exist on paper, but they are not strong enough to counter the powerful economic and social forces pulling farmers away from the land.
The study also explored a practical solution: what would it take to keep farmers on their land? Using a method that asks people how much they would pay to save something or how much they would need to be paid to give it up, the researchers gauged the farmers' true values. The farmers said they would be willing to pay a small annual contribution of 360,000 rupiah to help preserve their fields, showing a genuine desire to keep farming alive. However, to actually stop them from selling, the farmers indicated they would need a monthly compensation of 500,000 rupiah. This gap between what they are willing to pay and what they need to be paid is a common economic phenomenon, reflecting the deep emotional and social value farmers place on their land, which goes far beyond its market price. The researchers suggest that a policy instrument based on these figures could work. By providing a monthly compensation of around 500,000 rupiah to farmers who keep their land in production, the government could create a financial safety net that makes farming a viable alternative to selling. This approach would not only protect the food supply but also support the livelihoods of rural families, offering a concrete path to securing Indonesia's food future against the relentless pressure of urban expansion.
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