The Nexus between Food Security and Investment, Exports, Infrastructure, and Human Capital Development

Abstract

Objectives: We examine the impact of economic sectors, including agriculture, industry, services, and exports, on Indonesia’s food security. Furthermore, we investigate the influence of three types of capital—direct investment, infrastructure, and human capital—and several socioeconomic factors—inequality, unemployment, poverty, and population density. Methods/Analysis: Using data on all 34 Indonesian provinces from 2011 to 2019, we employ the generalized method of moments and other panel techniques to assess four food security indicators: a principal component analysis-based food index, daily protein consumption, daily calorie consumption, and agricultural production. Findings: investment significantly drives agricultural production and food security. Net exports are positively associated with calorie intake, protein consumption, and food security. Surprisingly, infrastructure expenditure negatively affects calorie and protein consumption. While expanding manufacturing activities threaten food security, growth in agriculture and the service sector supports higher protein and calorie intake. Factors such as income inequality, poverty, and unemployment positively correlate with agricultural production. Novelty/Improvements:As societal welfare decreases, agricultural production increases alongside shifts in dietary preferences. Agriculture serves as a source of employment during economic downturns. Conversely, a higher Human Development Index and population density suggest that as Indonesia flourishes economically, the demand for calorie- and protein-rich foods grows, even as agricultural production declines. Doi: 10.28991/HEF-2023-04-02-07 Full Text: PDF

Keywords

• food security
• sustainable agriculture
• food products trade
• foreign direct investment
• agricultural production.