Analysis of Income Inequality Reduction Through Agricultural Sector Development Performance in the Sulawesi Region
Keywords:
Inequality, Income, Gini Ratio, Agriculture, Development
Abstract
This study aims to analyze the reduction of income inequality through the development performance of the agricultural sector in the Sulawesi region. The focus of the study was directed to assess the influence of the agricultural subsector on the Gini Ratio as an indicator of income inequality in six provinces, namely South Sulawesi, West Sulawesi, Southeast Sulawesi, Central Sulawesi, Gorontalo, and North Sulawesi. The research uses a quantitative approach with secondary data sourced from the Central Statistics Agency. The data analyzed covers the period 2015–2025, resulting in 66 panel data observations. The analysis technique used is multiple regression of panel data, which combines time and region dimensions to test the simultaneous and partial influence of the performance of agricultural subsectors on income inequality more objectively. The results of the study show that the performance of the development of the agricultural sector simultaneously has a significant effect on the Gini Ratio in the Sulawesi Region, with the ability to explain the model of 81.0716%. Partially, the sub-sectors of food crops, plantation crops, and fisheries have a positive and significant effect, so that the increase tends to increase income inequality. On the other hand, the sub-sectors of livestock, agricultural and hunting services, as well as forestry and logging have a negative and significant effect, thus playing a role in reducing inequality. The horticulture subsector has a negative effect, but it is not significant. This study recommends that local governments prioritize investment, access to capital, technology, and capacity building in subsectors that reduce inequality, as well as ensure the development of the sub-sectors of food crops, plantations, and fisheries accompanied by equitable distribution of production access, institutional strengthening, downstreaming, education, infrastructure, and job creation in an inclusive and sustainable manner.
References
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Mardones, C., & del Río, R. (2022). Agricultural growth and regional income inequality: Evidence from developing regions. Agricultural Economics, 53(5), 709–724. https://doi.org/10.1111/agec.12716
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Mzyece, D., Ngcobo, S., & Dlamini, B. (2023). Agricultural diversification and income distribution in rural economies. Sustainability, 15(14), 11108–11125. https://doi.org/10.3390/su151411108
Nchare, A., & Badmus, M. A. (2024). Agricultural growth, asset ownership and income inequality in rural economies. Heliyon, 10(3), e24562. https://doi.org/10.1016/j.heliyon.2024.e24562
Ndlovu, E., Thamaga-Chitja, J., & Ojo, T. (2023). Agricultural commercialization and rural income inequality: A systematic review of recent evidence. Heliyon, 9(8), e18867. https://doi.org/10.1016/j.heliyon.2023.e18867
Nugroho, A. D., & Lakner, Z. (2022). Impact of economic globalisation on agriculture in developing countries: A review. Agricultural Economics, 68(5), 180–188. https://doi.org/10.17221/401/2021-AGRICECON
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Smidt, H. J., & Jokonya, O. (2022). Factors affecting digital technology adoption by small-scale farmers in agriculture value chains (AVCs) in South Africa. Information Technology for Development, 28(3), 558–584. https://doi.org/10.1080/02681102.2021.1975256
Suroso, A. I., Firdaus, M., & Fariyanti, A. (2023). Horticultural development and rural economic inclusion in Indonesia. Jurnal Manajemen & Agribisnis, 20(2), 145–158. https://doi.org/10.17358/jma.20.2.145
Tang, T., Cuesta, L., Tillaguango, B., Alvarado, R., Rehman, A., Bravo-Benavides, D., & Zárate, N. (2022). Causal link between technological innovation and inequality moderated by public spending, manufacturing, agricultural employment, and export diversification. Sustainability, 14(14), 8474. https://doi.org/10.3390/su14148474
Wahyuni, S., Fariyanti, A., & Burhanuddin, B. (2021). Livestock agribusiness development and rural income improvement in Indonesia. Jurnal Manajemen & Agribisnis, 18(3), 291–304. https://doi.org/10.17358/jma.18.3.291
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Yang, Y. H., Huo, Z. H., Zhang, M., & Alam, M. J. (2026). Digital rural construction and income inequality among farmers: The role of livelihood capital and digital divide. Frontiers in Sustainable Food Systems, 10, 1682886. https://doi.org/10.3389/fsufs.2026.1682886
Yaohong, W., Firdaus, R. B. R., Xu, J., Dharejo, N., & Jun, G. (2025). China’s rural revitalization policy: A PRISMA 2020 systematic review of poverty alleviation, food security, and sustainable development initiatives. Sustainability, 17(2), 569. https://doi.org/10.3390/su17020569
Zhang, X., Chang, M., Zhang, C., Zhang, S., & Lin, Q. (2025). The impact of internet use on income inequality from different sources among farmers: Evidence from China. Agriculture, 15(8), 818. https://doi.org/10.3390/agriculture15080818
Zheng, J., & Li, G. (2024). The impact of agricultural product branding on farmers’ income inequality: Evidence from China. Frontiers in Sustainable Food Systems, 8, 1488347. https://doi.org/10.3389/fsufs.2024.1488347
Ahmed, M., Hassan, S., & Rahman, M. (2024). Livestock development, rural livelihoods and income distribution in developing countries. Journal of Agriculture and Food Research, 15, 100955–100968. https://doi.org/10.1016/j.jafr.2024.100955
Barrett, C. B., Christiaensen, L., Sheahan, M., & Shimeles, A. (2022). On the structural transformation of rural Africa and inclusive agricultural development. World Development, 151, 105726–105739. https://doi.org/10.1016/j.worlddev.2021.105726
Barroga, E., Matanguihan, G. J., Furuta, A., Arima, M., Tsuchiya, S., Kawahara, C., Takamiya, Y., & Izumi, M. (2023). Conducting and writing quantitative and qualitative research. Journal of Korean Medical Science, 38(37), e291. https://doi.org/10.3346/jkms.2023.38.e291
Belton, B., Bush, S. R., & Little, D. C. (2021). Not just for the wealthy: Rethinking fisheries and aquaculture development for inclusive growth. Marine Policy, 128, 104478–104489. https://doi.org/10.1016/j.marpol.2021.104478
Binswanger-Mkhize, H. P., & Savastano, S. (2022). Agricultural intensification and income distribution in developing countries: New perspectives on rural transformation. World Development, 152, 105800–105814. https://doi.org/10.1016/j.worlddev.2021.105800
Borgstede, M., & Scholz, M. (2021). Quantitative and qualitative approaches to generalization and replication–A representationalist view. Frontiers in Psychology, 12, 605191. https://doi.org/10.3389/fpsyg.2021.605191
Chisadza, C., Clance, M., Sheng, X., & Gupta, R. (2023). Climate change and inequality: Evidence from the United States. Sustainability, 15(6), 5322. https://doi.org/10.3390/su15065322
Choudhury, A., & Sahu, S. (2023). Reconciling the mixed evidence in the fiscal decentralization-government size nexus using panel quantile regression. Economic Modelling, 125, 106347. https://doi.org/10.1016/j.econmod.2023.106347
Chowdhury, S., Khan, S., Sarker, M. F. H., & Islam, M. K. (2022). Does agricultural ecology cause environmental degradation? Empirical evidence from Bangladesh. Heliyon, 8(6), e09677. https://doi.org/10.1016/j.heliyon.2022.e09677
Dasgupta, S., Emmerling, J., & Shayegh, S. (2023). Inequality and growth impacts of climate change—insights from South Africa. Environmental Research Letters, 18(12), 124007. https://doi.org/10.1088/1748-9326/ad0448
Gritten, D., Saastamoinen, O., Mola-Yudego, B., & Keskitalo, E. C. H. (2022). Community forestry, rural livelihoods and equitable benefit distribution: Evidence from developing regions. Forests, 13(4), 566–582. https://doi.org/10.3390/f13040566
Hermawan, W., Yusuf, M., & Maipita, I. (2023). A simulation of increasing rice price toward the disparity of income distribution: An evidence from Indonesia. Heliyon, 9(3), e13785. https://doi.org/10.1016/j.heliyon.2023.e13785
Hidayat, R., Sari, D. P., & Nugroho, A. D. (2024). Agricultural sector performance and regional income inequality in Indonesia. Jurnal Ekonomi Pembangunan, 25(1), 45–60. https://doi.org/10.23917/jep.v25i1.23456
Khan, M. A., Khan, M. A., Ahmed, M., & Ali, M. (2022). Agricultural development, income inequality and rural welfare: Evidence from developing economies. Sustainability, 14(18), 11536–11552. https://doi.org/10.3390/su141811536
Krishna, V. V., Kubitza, C., Pascual, U., & Qaim, M. (2023). Cash crop expansion, rural development and income inequality: Emerging evidence from agricultural regions. World Development, 168, 106245–106259. https://doi.org/10.1016/j.worlddev.2023.106245
Kurniawan, R., & Widyastuti, T. (2025). Inclusive agricultural development and regional income equality in Indonesia. Jurnal Ekonomi Pembangunan Indonesia, 26(1), 1–18. https://doi.org/10.21002/jepi.2025.01
Liao, R., Wei, Y., Bai, Y., & Liu, J. (2025). Bridging the divide: How agricultural technological innovation narrows the urban–rural income gap in China. Frontiers in Sustainable Food Systems, 9, 1595161. https://doi.org/10.3389/fsufs.2025.1595161
Lim, W. M. (2024). What is quantitative research? An overview and guidelines. Australasian Marketing Journal, 33(3), 325–348. https://doi.org/10.1177/14413582241264622
Liu, J., Li, X., Liu, S., Rahman, S., & Sriboonchitta, S. (2022). Addressing rural–urban income gap in China through farmers’ education and agricultural productivity growth via mediation and interaction effects. Agriculture, 12(11), 1920. https://doi.org/10.3390/agriculture12111920
Mardones, C., & del Río, R. (2022). Agricultural growth and regional income inequality: Evidence from developing regions. Agricultural Economics, 53(5), 709–724. https://doi.org/10.1111/agec.12716
Marion, P., Lwamba, E., Floridi, A., Pande, S., Bhattacharyya, M., Young, S., Villar, P. F., & Shisler, S. (2024). The effects of agricultural output market access interventions on agricultural, socio-economic, food security, and nutrition outcomes in low- and middle-income countries. Campbell Systematic Reviews, 20(3), e1411. https://doi.org/10.1002/cl2.1411
Maryudi, A., Nawir, A. A., Purwanto, R. H., Sahide, M. A. K., & Fisher, M. R. (2023). Social forestry and rural welfare improvement in Indonesia: Recent evidence and policy implications. Forest Policy and Economics, 151, 102959–102972. https://doi.org/10.1016/j.forpol.2023.102959
Mottaleb, K. A., Krupnik, T. J., & Erenstein, O. (2022). Agricultural services, mechanization and rural income enhancement in developing countries. Agricultural Systems, 198, 103381–103392. https://doi.org/10.1016/j.agsy.2022.103381
Moyer, J. D., Pirzadeh, A., Irfan, M., Solórzano, J., & Stone, B. (2023). How many people will live in poverty because of climate change? A macro-level projection analysis to 2070. Climatic Change, 176, 141. https://doi.org/10.1007/s10584-023-03611-3
Muyanga, M., Jayne, T. S., & Burke, W. J. (2022). Agricultural productivity growth and rural income inequality in Sub-Saharan Africa. Food Policy, 109, 102254–102267. https://doi.org/10.1016/j.foodpol.2022.102254
Mzyece, D., Ngcobo, S., & Dlamini, B. (2023). Agricultural diversification and income distribution in rural economies. Sustainability, 15(14), 11108–11125. https://doi.org/10.3390/su151411108
Nchare, A., & Badmus, M. A. (2024). Agricultural growth, asset ownership and income inequality in rural economies. Heliyon, 10(3), e24562. https://doi.org/10.1016/j.heliyon.2024.e24562
Ndlovu, E., Thamaga-Chitja, J., & Ojo, T. (2023). Agricultural commercialization and rural income inequality: A systematic review of recent evidence. Heliyon, 9(8), e18867. https://doi.org/10.1016/j.heliyon.2023.e18867
Nugroho, A. D., & Lakner, Z. (2022). Impact of economic globalisation on agriculture in developing countries: A review. Agricultural Economics, 68(5), 180–188. https://doi.org/10.17221/401/2021-AGRICECON
Ogutu, S. O., Qaim, M., & Mathenge, M. K. (2021). Agricultural commercialization and household welfare: Evidence from smallholder farmers in Africa. Food Policy, 100, 102035–102047. https://doi.org/10.1016/j.foodpol.2020.102035
Ongachi, W., & Belinder, I. (2025). Agricultural extension as a pathway to livelihood diversification and sustainable development in rural communities: A systematic review. BMC Agriculture, 1, 6. https://doi.org/10.1186/s44399-025-00005-x
Ouko, K. O., Ogola, J. R. O., & Ng’on’ga, C. A. (2022). Youth involvement in agripreneurship as nexus for poverty reduction and rural employment in Kenya. Cogent Social Sciences, 8(1), 2078527. https://doi.org/10.1080/23311886.2022.2078527
Prasetyo, E., & Supriyati, S. (2024). Peran jasa pertanian dalam meningkatkan kesejahteraan dan pemerataan ekonomi pedesaan di Indonesia. Jurnal Agro Ekonomi, 42(1), 57–72. https://doi.org/10.21082/jae.v42n1.2024.57-72
Purcell, S. W., Ngaluafe, P., Lalavanua, W., & Crona, B. I. (2023). Fisheries development, market access and income inequality in coastal communities. Ocean and Coastal Management, 239, 106621–106634. https://doi.org/10.1016/j.ocecoaman.2023.106621
Putria, A. C., Prakoso, T. S., & Ohyver, M. (2023). Modeling the effect of poverty rate, GDRP, and minimum wage, on mean years of schooling in Gorontalo province with panel data regression. Procedia Computer Science, 216, 510-516. https://doi.org/10.1016/j.procs.2022.12.163.
Rahman, M. S., Islam, M. R., & Hasan, M. K. (2024). Agricultural productivity growth, rural employment and income distribution: Empirical evidence from developing regions. Journal of Agriculture and Food Research, 15, 100982. https://doi.org/10.1016/j.jafr.2024.100982
Ratnasari, V., Audha, S. H., & Dani, A. T. R. (2023). Statistical modeling to analyze factors affecting the middle-income trap in Indonesia using panel data regression. MethodsX, 11, 102379. https://doi.org/10.1016/j.mex.2023.102379.
Sari, D. P., & Dharmawan, A. H. (2022). Perkebunan komersial dan dinamika ketimpangan pendapatan rumah tangga pedesaan di Indonesia. Sodality: Jurnal Sosiologi Pedesaan, 10(3), 245–259. https://doi.org/10.22500/10202238123
Sharmiladevi, J. C. (2023). Impact study of agricultural value added on foreign direct investment, economic development, trade openness for India following ARDL approach. Cogent Economics & Finance, 11(2), 2270595. https://doi.org/10.1080/23322039.2023.2270595
Smidt, H. J., & Jokonya, O. (2022). Factors affecting digital technology adoption by small-scale farmers in agriculture value chains (AVCs) in South Africa. Information Technology for Development, 28(3), 558–584. https://doi.org/10.1080/02681102.2021.1975256
Suroso, A. I., Firdaus, M., & Fariyanti, A. (2023). Horticultural development and rural economic inclusion in Indonesia. Jurnal Manajemen & Agribisnis, 20(2), 145–158. https://doi.org/10.17358/jma.20.2.145
Tang, T., Cuesta, L., Tillaguango, B., Alvarado, R., Rehman, A., Bravo-Benavides, D., & Zárate, N. (2022). Causal link between technological innovation and inequality moderated by public spending, manufacturing, agricultural employment, and export diversification. Sustainability, 14(14), 8474. https://doi.org/10.3390/su14148474
Wahyuni, S., Fariyanti, A., & Burhanuddin, B. (2021). Livestock agribusiness development and rural income improvement in Indonesia. Jurnal Manajemen & Agribisnis, 18(3), 291–304. https://doi.org/10.17358/jma.18.3.291
Wu, S., Ang, L. Z., & Nugroho, T. W. (2026). Agricultural development in Southeast Asia: A bibliometric and comparative analysis of palm oil, rubber, and rice (2014–2024). Cogent Food & Agriculture, 12(1), 2611178. https://doi.org/10.1080/23311932.2025.2611178
Wudil, A. H., Ali, A., Usman, M., Radulescu, M., Sass, R., Prus, P., & Musa, S. (2023). Effects of inequality of access to irrigation and water productivity on paddy yield in Nigeria. Agronomy, 13(9), 2195. https://doi.org/10.3390/agronomy13092195
Yang, Y. H., Huo, Z. H., Zhang, M., & Alam, M. J. (2026). Digital rural construction and income inequality among farmers: The role of livelihood capital and digital divide. Frontiers in Sustainable Food Systems, 10, 1682886. https://doi.org/10.3389/fsufs.2026.1682886
Yaohong, W., Firdaus, R. B. R., Xu, J., Dharejo, N., & Jun, G. (2025). China’s rural revitalization policy: A PRISMA 2020 systematic review of poverty alleviation, food security, and sustainable development initiatives. Sustainability, 17(2), 569. https://doi.org/10.3390/su17020569
Zhang, X., Chang, M., Zhang, C., Zhang, S., & Lin, Q. (2025). The impact of internet use on income inequality from different sources among farmers: Evidence from China. Agriculture, 15(8), 818. https://doi.org/10.3390/agriculture15080818
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Published
2026-06-17
How to Cite
Christoporus, C., Samudin, S., Metubun, N., & Hippy, M. Z. (2026). Analysis of Income Inequality Reduction Through Agricultural Sector Development Performance in the Sulawesi Region. International Journal of Economics, Business and Innovation Research, 5(04), 1385-1411. https://doi.org/10.63922/ijebir.v5i04.4374
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