The Influence of Village Fund Allocation in Improving Skills and Procuring Agriculture Facilities and Infrastructure on Increasing Rural Area Farmers’ Income in Muna Regency, Indonesia

Abstract

Objective: Rural areas have limited funding to increase farmers' production and income due to limited capital originating from villages due to low farming productivity, inadequate knowledge and technology used by farmers, resulting in low population income and increasing poverty in rural areas. This research aims to analyze the influence of Village Fund allocations in increasing rural farmers' income through increasing farmers' skills in carrying out farming activities and procuring agricultural production facilities for food crops.

Method: This research was carried out in three sub-districts that have potential for food crop farming in Muna Regency. Randomly determine 150 farmers as respondents. Using primary and secondary data. Primary data is collected through questionnaires filled out by farmers, in the form of production data, commodity price data, production and marketing cost data, and data on farmers' net income for each planting season. Secondary data is the Village Fund allocation for improving farmers' skills, and the Village Fund allocation for providing agricultural infrastructure for food crops. The analysis model uses multiple linear regression, with three variables (1) village fund budget allocation for improving farmer skills (𝑋1), and (2) Village fund budget allocation for procurement of agricultural facilities for food crops (𝑋2). (3) Average farmer income each planting season (Y). Assumptions: no autocorrelation, norm distribution, and homoscedastic. The two independent variables do not have multicollinearity, if the variance inflation factor (VIF) of each independent variable 𝑙𝑋1 and 𝑙𝑋2 is less than 10.

Findings: The results of checking the assumptions of the multiple regression model show that the residual assumptions (autocorrelation, normality, and homoscedasticity) are met. Likewise with the assumption that the two independent variables are met. This means that there is an influence of village fund allocation to improve farmer skills which is valid or believed to be true. Strengthened by the value of the Durbin Watson statistic of 1.100495 which is greater than the R- squared statistical value of 0.937751.

Conclusions: Allocation of Village Funds has a positive effect on increasing the income of rural farmers through improving farmer skills and providing agricultural production facilities in rural areas.