Knowledge and Information Transfer in Indonesia's Agricultural Society

Herry Suhermanto
Department of Economics
Claremont Graduate University
March 2002

Among factors influencing the efficiency of production are labor, capital, raw materials, and knowledge and information. These later factors -knowledge and information are rarely discussed in economics literatures, since it is difficult for researchers to study them and account for their effects. An input of appropriate knowledge and information might maximize economic outputs. If producers in an economy have the right kind of knowledge and information, they can boost the economy. However, there are gaps between what certain individuals and what other individuals know in any society, even in a homogenous society such as farmers. The consequences of these gaps can often be serious, amid poverty. Not everyone in an economy could have the right kind of knowledge and information to produce output efficiently. People are poor not because of lazy, they may be hard working people but lack of proper knowledge and information. In light of this, how may we close this kind of gap?

Let us look at two ways to close the gap of knowledge and information. First, public sector or government-facilitated efforts might close the gap through the distribution of knowledge and information to the needy. Such government-assisted programs includes, for examples, training, publications, leaflets, and the opening of educational institutions. Secondly, communication among individuals can help knowledge and information to be transmitted from one individual to another. However, communications among individuals are limited in ways that do not necessarily optimize transfer of knowledge and information to the needy. One primary reason that individual communication cannot be relied on for optimum knowledge transfer is that people tend to cluster in small groups based on location, occupation, family relations, or friendships. The boundaries of these groups can prevent the transfer of knowledge to those who need it the most.

Because communication between individuals cannot be relied on for knowledge and information transfer to the most needy, government efforts become a more important focus in this research. In my work, I study the case of a successful effort to transfer appropriate knowledge and information within the agricultural sector in the country of Indonesia. This example is particularly useful to those interested in studying knowledge and information transfer because governmental programs helped to overcome a severe shortage of useful information among large numbers of worker in agricultural sector.

The Indonesia's agricultural society consists of farmers, fishermen, hunters, and foresters. Most farmers had used inefficient production methods, so that the production of agriculture never reached its maximum capacity. These farmers needed knowledge and information on how to cultivate their land appropriately using better seeds, irrigation systems and fertilizers. They could not access this particular knowledge and information nor distributed it by themselves. They lived below the level of self-sufficiency and under the cycle of poverty: low income, low nutrition, low capability, and low productivity, and low income, again, as the result of low productivity.

The Indonesia's government managed to break the poverty cycle of its farmers and brought these farmers to a level of productivity at which they could support themselves, primarily in food production. The government's efforts included providing the farmers with infrastructures, good seeds, and fertilizers. Importantly, the government programs also gave the farmers knowledge of how to use all these resources through training provided by the governmental agriculture extension service. The extension services have played an important role in transferring knowledge and information from government agriculture research institutes, markets, and other private institutions to the farmers.

A careful analysis of the agricultural extension services in Indonesia might help us identify mechanisms for how government agents help to close the knowledge and information gaps. It might provide us with insights regarding how discrepancies in knowledge and information can be overcome to increase productivity. My research will shed light on an important part of Indonesia's economic policy and history, particularly in the agricultural sector. Thorough analysis of examples of successful efforts to transfer knowledge and information can therefore both fill a gap in economic theory and help us gain deeper understanding of economic processes in particular societies.