Agriculture Saves Aceh's Economy, Contributes to Employment

Aceh's economy is supported by the agricultural, trade and processing sectors. Economic growth absorbs labor.

KOMPAS/ZULKARNAINI

On Thursday (16/11/2023), the price of red chili peppers in Bireuen Regency reached Rp 37,000 per kilogram. In 2022, the production of red chili peppers in Aceh reached 42,000 tons.

BANDA ACEH, KOMPAS — The economic growth rate in Aceh Province for the first quarter of 2024 increased by 4.82 percent compared to the same period last year. At the same time, the number of unemployed also decreased by 4,760 people to 145,000 people.

Head of the Aceh Central Statistics Agency, Ahmadriswan Nasution, said on Tuesday (6/5/2024) that economic growth has occurred in many sectors, such as transportation, agriculture, fisheries, warehousing, and electricity and gas supply.

"Aceh's economy is still dominated by agriculture, forestry and fisheries," said Ahmadriswan.

Ahmadriswan said that the structure of Aceh's economy is supported by a number of business fields, namely agriculture, forestry and fisheries; wholesale and retail trade; government administration; construction; as well as transportation and warehousing.

The extent of Aceh's economic dependence on the agriculture, forestry, and fisheries sectors shows that the majority of the province's residents live off farming sources. The most dominant agricultural products in Aceh are rice, oil palm, and coffee. Meanwhile, most coastal residents make a living from the sea's resources.

Also read: Rice Production in Aceh Drops Far, Food Security Is Confused

Aceh is among the top 10 provinces in Indonesia that produce rice. In 2022, rice production in Aceh reached 1,509,456 tons with a harvesting area of ​​271,750 hectares. Meanwhile, Aceh's marine capture fishery production in 2022 reached 324,618 tons.

Ahmadriswan stated that the price of unhusked rice at the farmer level during the early harvest season in 2024 is quite good, ranging between IDR 5,250 and IDR 6,900 per kilogram. With a farmer exchange rate (NTP) of 114.66 percent, this means that farmers will experience a profit.

Ahmadriswan stated that the government needs to give significant attention to the agricultural, forestry, and fisheries sectors. Every year, these sectors contribute greatly to economic growth. During the Covid-19 pandemic, while other sectors experienced contraction, agriculture was still able to grow.

Economic growth is closely linked to the decline in unemployment. According to the Central Bureau of Statistics in Aceh, the number of unemployed individuals in February 2024 was 145,000, a drop of 4,760 people.

"There was an absorption of labor during the period February 2023-February 2024," said Ahmadriswan.

Also read: Aceh Finds New Oil and Gas Well Reserves

There is a largest sector that absorbs labor force, namely agriculture, trade, and manufacturing industry. On the other hand, the number of formal workers or employees in Aceh reached 36.81 percent and informal workers or non-employees amounted to 63.19 percent.

Meanwhile, Rustam Effendi, a lecturer at the Faculty of Economics at Syiah Kuala University in Banda Aceh, said that although the agricultural sector is a backbone of Aceh's economy, the government's attention to this sector is not yet optimal. Farmers still struggle to increase production and have little ability to process their harvests.

The government needs to pay great attention to the agriculture, forestry and fisheries sectors.

"Most of the harvested rice in Aceh is sold directly to North Sumatra. Farmers are forced to sell their rice because they have to pay high production costs," said Rustam.

DOK PRIBADI EDI AZHARI

Apart from producing rice, Pidie Regency also produces coffee and horticulture.

Rustam stated that crop failure still often occurs due to natural disasters, droughts, and insufficient availability of fertilizers. At the same time, agricultural infrastructure is also not yet optimal. For example, the slow repair of the Krueng Pasee irrigation in North Aceh has prevented thousands of hectares of rice fields from reaching their optimal potential.

Previously, Acting Governor of Aceh Bustami Hamzah stated that in order to support current agricultural activities, the development of the Keureuto Dam in North Aceh Regency and the Rukoh Dam in Pidie Regency must be accelerated.

The Keureuto Reservoir can irrigate 9,420 hectares of rice fields, while the Rukoh Dam can irrigate 11,950 hectares of rice fields.

Rukoh Dam and Keureuto Dam are National Strategic Projects which are targeted for completion by the end of 2024.