Constraints of farm size enlargement in the rice sector of Central Java']Java: A case study

Rice sector in East Java and Central Java which are the main rice producing areas do not have a comparative and competitive advantage due to the small farm size. Therefore, we need to explore whether both the scale economies related condition and the other conditions are satisfied in Central and East Java. However, in this study we only conducted the field survey in Central Java due to some limitations. This study examines whether the necessary conditions for enlargement of farm sizes are satisfied or not and investigates the constraints of enlargement of farm sizes. The results show that there are some evidences on the existence of scale economies in the study that benefit the enlargement of farm size. The economic condition of farm- land lease is satisfied since the large-scale farmer's surplus is greater than that of the small-scale farmer. However, farmland enlargement has not been progressed due to some constraints: 1) there is a surplus labor in the rural Central Java, therefore, they do not lease out the farmland; 2) the existence of 'tanah bengkok' or village; 3) the land market is not competitive, the land tenancy occur between neighborhood and close relationship between owner and tenant, thus large scale farmers do not get incentives to enlarge farm size; 4) fragmentation of land of large-scale farmers; 5) expectation for conversion of agricultural land to non-agricultural land.