Resouce allocation on small farms in Bogor Indonesia

Abstract

This study was based on data obtained from a random sample of farms near the provincial road in the district Leuwiliang, Bogor, Indonesia. The major objective of the study was to analyze the 1962 economic organization of farms in this area with respect to 4 input categories. These are land, animal labor, human labor and current expenditures, the latter consisting of seed and fertilizer costs. hypothesized that farm resources were not used efficiently. The results of the study indicate that, by using the present method of production, resources had not been used in the optimum combination. Too little fertilizer and too much human labor had been applied. Farm sizes should be increased, and necessary changes in the input combination need to be made, if more profitable farm operation is desired. Further, it was concluded that the optimum input combination to achieve maximum profit should not be recommended, as long as there is no possibility of finding other uses for the released farm labor. Based on this conclusion, the importance of balanced economic growth, implicating the efficient use of resources, in both sectors of agriculture and industry is emphasized.