Impact of Special Allocation Fund for Irrigation and Agriculture on Rice Production in Indonesia
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Indonesia's rice production ranks among the largest in the world; however, it remained relatively stagnant, averaging 54.60 million tons per year from 2019 to 2022. One government policy aimed at increasing rice production is the Special Allocation Fund (Dana Alokasi Khusus [DAK]) for irrigation and agriculture. This fund is transferred from the central government to local governments and is intended to strengthen food security. This study aims to examine the effects of DAK for irrigation and agriculture on rice production while considering the expenditure authority of local governments across Indonesia. The units of observation comprise 441 regencies and cities that meet the criteria of having rice fields, maintaining continuous rice production, and receiving DAK for irrigation or agriculture during the 2019–2021 period. The methodology employed in this study is a fixed-effects model with panel-corrected standard errors (PCSE). The results indicate that only DAK for irrigation under regency/city authority has a positive and statistically significant effect on rice production, whereas the other examined factors do not show significant effects. Therefore, this study recommends optimizing the use of DAK for irrigation to support agricultural production. Additionally, the study recommends developing new rice-field areas outside Java; however, further technical and feasibility studies are required before new rice fields are established
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