Impact of agricultural infrastructure and government support on farmers’ welfare in Indonesia

The Indonesian government has focused on building infrastructure and providing support for agricultural development, both in Java, its economic center, and outside of Java. Therefore, this study aims to examine the impacts of agricultural infrastructure development and government support on Indonesian farmers’ welfare. The study used secondary data from 33 provinces from 2007-2021. The data were analysed using multilevel mixed-effect logistic regression and propensity score matching. The use of such models is due to the significant heterogeneity of parameters between observations. The findings show that the urea fertilizer subsidies, two-wheeled tractors and water pump assistances have a positive impact and improve the farmers’ welfare in Java. Meanwhile, the urea fertilizer subsidies, four-wheeled tractor assistance, and the construction of ponds have a positive impact and improve the farmers’ welfare outside of Java. The surprising observation from our study is that the food self-sufficiency program harms the farmers’ welfare in both areas.