Alleviating Poor and Hungry People through Generating Employment Tahlim Sudaryanto Indonesian Center for Agriculture Socio Economic and Policy Studies

Outline 1. Introduction 2. Paradim on Poverty Alleviation and Hunger 3. Agricultural Land-Related Policies 4. Policies Addressing Supply Constraints 5. Policies and Program to Broaden Rural Economy 6. Specific Program:Cash for Work 7. Supply Side of Labor:Human Resource Development 8. Concluding Remarks

Introduction  Two paths out of poverty (World Bank, 2006): (1)shift from subsistence to commercial farming; (1)shift from subsistence to commercial farming; (2)shift from non-farm informal enterprises to formal and more profitable business. (2)shift from non-farm informal enterprises to formal and more profitable business.  To create new employemnet needs intensification of existing activities and promoting new economic activities.

Paradigm on Poverty Alleviation and Hunger  From partial sector to multi-sector community development approach  Three principles: (1) acknowledge the capacity and social capital of the poor; (2) involves the poor in decision making process; (3) transparent and accountable program;

Agricultural Land-Related Policies Agricultural Land-Related Policies 1.Assist the poor in getting access to land (community titling, rental contract, informal land market); 2.Assist landless and small farmers in land allotment; 3.Complemented with effective rural economic development.

Policies Addresing Supply Constraints  Persistently low and decelerating growth due to decreasing farm size and yield.  Related policies: (a) increase government expenditure on infrastructures, R&D, and extension; (b) provide incentive for private investment in infrastructures; (c) R&D reform to facilitate private sector; (d) appropriate farming incentive.

Policies and Progams to Broaden Rural Economy  To mainstream informal employment (Chen et.al.,2004) and empower the poor (Singh, 2006): (a)promote self-employed and informal wage worker through microfinance, skill training, and technology; (b) secure rights for self-employed, particularly access to credit and other resources, as well as equitable policies; (c) protect informal workers through insurance schemes; (d) raise the voice of informal workers through strengthening their organization and representation in policy making;

Policies and Progams to Broaden Rural Economy (con’t) (e)encourage the poor to move to the formal labor markets; (f)acknowledge and encourage entrepreneurial skill of the poor;  Agenda to promote smallholder (Hazell, et.al., 2007): (a)macroeconomic stability and state funding; (b) encourage farmers to follow market demand and improve marketing system; (c) institutional innovations in the provision of inputs and services;

Policies and Progams to Broaden Rural Economy (con’t)  Lesson learnt from various poverty reduction projects: (a) targeted directly to the poorest segment of the poor; (b) start with capacity building of the poor; (c) formulate program involving local community; (d) develop and strengthen farmer group; (e) secure fund to finance initial investment on a revolving basis, not fully grant.

Specific Program:Cash for Work  Employment generation program needs longer time to implement.  In the short run, poor people needs immediate job opportunity.  Government finances specific program such as cash for work;  Areas of the work: rehabilitation of rural infrastructures (irrigation canal, rural road, etc).  Beneficiaries should be targeted to the chronic poor.

Supply Side of Labor:Human Resource Development  To facilitate access of the poor to new employment, we need to build their capacity in accordance to labor market demand.  In the longrun:education, health and nutrition  In the shortrun: informal and tailor-made skill training, based on industry demand.  Encourage the involvement of private sector and CSO.

Concluding Remarks  In the longrun, to generate employment we need consistently promote new economic activities targeted to the poor in on-farm, off-farm, and non-farm sector.  In the shortrun: develop specific program such as cash for work.  Need to pay attention on the supply side of labor:education, health, nutrition, and skill training.