Workers shift to industry as farming sector shrinks

Workers shift to industry as farming sector shrinks

MANILA (AFP): The shrinking Indonesian agricultural sector is forcing farm workers to shift to industrial jobs, a Jakarta-based think-tank said in a paper presented here yesterday.

Agriculture's contribution to the domestic economy has dropped to 16 percent from 30 percent in the 1970s, said Tubagus Feridhanusetyawan, fellow at the Centre for Strategic and International Studies (CSIS).

A series of economic deregulation measures in the 1980s led to the expansion of low-skilled, export-oriented manufacturing sectors, he told a regional conference here.

"As a result there has been massive labor movement from the agricultural sector," he said, without giving figures.

"The problem was that the location of the factories were mostly in non-rural areas so that these expanding, low-skilled industries have driven away the labor from the agricultural sector in rural areas."

Feridhanusetyawan said most factories for textiles, clothing and footwear were in big cities like Jakarta and Bandung.

"The government should create incentives for investment in small and medium scale labor-intensive industries to absorb this labor surplus," he said.

"mee creation of rural employment should be promoted so that farmers could participate in off-farm work without migrating to the urban areas," the analyst added..

The study, which he prepared with fellow CSIS analyst Mari Pangestu, was presented at an agricultural policy conference of the Asia-Pacific Economic Cooperation (APEC) forum here.

APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, the Philippines, Papua New Guinea, Singapore, South Korea, Taiwan, Thailand and the United States.