Village Funds in Indonesia: Impacts on Sustainable Agricultural Development

. This study examines the implementation of village funds allocated by the Indonesian government to boost agricultural growth in rural regions, with a focus on promoting sustainable farming practices among its 270.2 million populace. Utilizing a descriptive qualitative method and secondary data analysis, our findings underscore the crucial role of infrastructure development in improving access to agricultural production and distribution facilities. Although village funds have significantly bolstered the physical infrastructure facilitating farming operations, enhancing institutional frameworks, and spurring complementary agricultural ventures, our analysis indicates a disproportionate emphasis on infrastructure over human capital investments. As agriculture remains a dominant economic pursuit in rural Indonesia, it is vital that future allocations strike a balance between infrastructure and human resources. An integrated approach not only promotes food self-sufficiency and rural livelihood enhancements but also aligns with sustainable development goals, emphasizing the importance of empowering SMEs and the broader agricultural sector.


Introduction
The current global food crisis, exacerbated by climate change and population growth, presents a major challenge for countries like Indonesia, which has a large population of 270.2 million people.Ensuring food security is crucial, as access to food is a fundamental human necessity and a guaranteed human right.Such conditions encourage the Indonesian government to pay serious attention to the provision of food for its people.
According to the Head of the Center for Food Availability and Vulnerability at the Indonesian National Food Agency, the number of districts and cities vulnerable to food insecurity increased by 0.8% in 2021, rising from 70 (13.6%) to 74 districts and cities (14.4%).Additionally, 1,453 sub-districts remain vulnerable.Therefore, addressing the food issue in Indonesia requires a comprehensive and integrated solution that considers the needs of the community and the market.Collaborative efforts at both the central and regional levels are necessary, establishing a pattern of upstream-downstream collaboration.
To tackle this challenge, the central government has implemented programs such as the provision of village funds, known as Dana Desa (village funds).These funds are sourced from the State Budget and allocated to villages through the Regional Budgets of districts and cities.They are intended to support governance, development implementation, community development, and community empowerment [1].The National Law Number 6 of 2014 emphasizes the state's commitment to safeguard and empower villages, aiming to make them strong, advanced, independent, and democratic.
The allocation of village funds promotes equitable development in Indonesia.The Ministry of Finance specifies that 30% of the village funds received by village governments are allocated for operational expenses related to village governance, the Village Consultative Board (BPD), and the village fund allocation management team.The remaining 70% of the funds are designated for community economic empowerment, with a focus on poverty alleviation, education, health, and other sectors.These efforts aim to foster justice, prosperity, and thriving societies within villages [2].
In fact, rural communities in Indonesia have a high dependence on the agricultural sector.Therefore, the village funds program, which aims to improve the welfare of rural communities, is closely intertwined with sustainable agricultural development.The objective of this research is to analyze the implementation of village funds in various regions of Indonesia and examine how these funds are allocated to foster agricultural development.

Materials and method
This study was conducted using a qualitative descriptive approach between April and May 2023.The analysis involved secondary data related to the utilization of village funds in several regions of Indonesia.The selection of research locations followed a purposive sampling method to ensure representation from various islands in Indonesia.
The chosen sample locations were Bungo Regency in Jambi Province and Bantul Regency in the Special Region of Yogyakarta.Specifically, the study focused on Sungai Arang Village in Bungo Dani Subdistrict, Bungo Regency, and Panggungharjo Village in Sewon Subdistrict, Bantul Regency.The selection criteria were based on differences in agricultural potential, geographical characteristics, and regional development factors.
[3] According to the Village Development Index (IDM) published by the Ministry of Villages, Disadvantaged Regions, and Transmigration (Kemendesa PDTT) in 2022, Panggungharjo Village was classified as a self-reliant village with a score of 0.9030.Sungai Arang Village was considered an advanced village with a score of 0.7154.These disparities may have implications for budget allocation and the implementation of different programs and activities.
The data sample collected for this study focused on the utilization of village funds from 2015 to 2019.This time frame was chosen under the assumption that the village funds program was implemented prior to the onset of the COVID-19 pandemic.The period from 2020 to 2023 was not the primary focus of this research, as the allocation of funds during that time was predominantly redirected to urgent needs associated with the COVID-19 response.

Village funds and development in Indonesia
The objective of rural development, as outlined in [4] National Law Number 6 of 2014 about Village, is to enhance the well-being of rural communities, improve human quality of life, and alleviate poverty.This is accomplished through the fulfillment of basic needs, the development of village infrastructure, the promotion of local economic potential, and the sustainable utilization of natural resources and the environment [5].The management of village funds, dedicated to empowering rural communities, is collectively determined through village deliberations.This process encompasses the improvement of the quality of village planning processes, support for economic activities through Village-Owned Enterprises (BUMDesa), the establishment of empowerment cadre capacities, the organization of legal assistance for communities, the provision of health promotion initiatives, and capacity building through community groups [6].According to the Ministry of Finance's report on the Village Fund Policy 2021, the realization and absorption of village funds between 2015 and 2019 reached a high rate of 99.4% to 100%.Although the absorption rate experienced fluctuations, the variations were not statistically significant.The allocated budget value consistently increased over time, starting at IDR 20.76 trillion in 2015 and reaching IDR 70 trillion in 2019 [1].Based on the allocated budget, village funds have facilitated the implementation of programs that have had a notable impact on village development.The outcomes achieved through village funds from 2015 to 2019 have primarily focused on supporting economic activities and enhancing the quality of life in rural communities.The amount of village funds from 2015 to 2019 shows an increasing trend.This shows that the government is serious in running this program.
Village funds have created development in village since 2015.[9] Economic activities have been reinforced through the construction of 231,709 kilometers of village roads; 1,327,069 meters of bridges; 10,480 village markets; 39,226 BUMDesa initiatives boat moorings; 4,859 village reservoirs; 65,626 irrigation units; and 25,022 sports facilities.In terms of improving the quality of life, village funds have contributed to 59,640 activities in Early Childhood Education (PAUD); the construction of 36,184,121 meters of drainage systems; 20,127 integrated health posts (posyandu); 58,259 wells; 215,989 soil retaining structures the provision of clean water and sanitation facilities; and 11,599 village health posts (polindes).
Numerous studies have demonstrated the significant role of village funds in infrastructure development.The allocation of funds predominantly favors infrastructure projects.[10] Reported that the village funds allocated for infrastructure development ranged between 60% and 100% annually.However, the budget allocation for community empowerment programs has increased over the years due to a decline in infrastructure projects.[11] The result of research in Ulu Pulau Village, indicating that the implementation of village funds in village development and empowerment represents the execution of planned programs.The utilization of village funds predominantly focused on infrastructure development, such as the construction of plantation roads, bridges, Early Childhood Education (PAUD) facilities, and LPTQ buildings.In terms of community empowerment programs, the funds were allocated to support religious facilities, PAUD teacher salaries, Women's Empowerment and Family Welfare Activities (PKK), and religious activities.A similar pattern was observed in Sebakung Taka Village in 2018, where the limited funds necessitated a prioritization of infrastructure development, primarily comprising road construction and the creation of village reservoirs.Village funds were effectively utilized for empowerment purposes through training programs on producing salted fish crackers and promoting local products, thereby yielding positive impacts on the community's economy [12].
Furthermore, in Karangkates Village, village funds were allocated for village development and community empowerment.The development initiatives encompassed the construction and maintenance of village roads, irrigation systems, drainage rehabilitation, bridge construction and maintenance, healthcare services via integrated health posts (posyandu) and integrated family planning posts (posbindu), educational infrastructure through Early Childhood Education (PAUD) facilities, 3R waste management facility establishment, agricultural educational tourism development, water tourism projects, and the promotion of village technology through internet connectivity.The community empowerment programs included economic enterprise training, farmer and fisherman group training, training and counseling for village officials, capacity building for the Village Consultative Board (LMD), environmental security and comfort training, management of education and health services, vocational training, batik-making training, and enhanced community participation in village policy formulation [13].
[14] The result of research in Pejeng Kelod Village, revealing that village funds had significantly facilitated development and community empowerment endeavors.Notably, improvements in infrastructure and community empowerment were observed.Positive impacts were discernible through various empowerment initiatives in the health sector, such as the strengthening of integrated health posts (posyandu), Women's Empowerment and Family Welfare Activities (PKK), BUMDesa, and Community-Based Clean Water.

Village funds for agricultural development
From 2016 to 2019, Sungai Arang Village, Bungo Dani Subdistrict, Bungo Regency, Jambi, allocated a portion of the village funds for agricultural development.Prior to 2016, no allocation was made for agriculture, but subsequent years witnessed a significant shift in fund allocation towards the agricultural sector.The allocated amount in 2016 was noteworthy, amounting to IDR 211,376,000.00or 32.0% of the total village funds.however, there was a decline in 2017, with only 6.8% of the village funds allocated, equivalent to IDR 56,720,000.00.In 2018, the allocation rose once again, reaching IDR 335,000,000.00or 45.0% of the funds.By 2019, the allocation decreased to IDR 137,107,000.00or 16.6% of the total village funds dedicated to agricultural development.
In another region, Panggungharjo Village in Sewon District, Bantul Regency, Yogyakarta, also witnessed the allocation of village funds for agricultural development starting from 2016.Similarly, no allocation was made in 2015, but a shift occurred in the subsequent years.In 2016, IDR 9,468,000.00or 1.1% of the village funds were allocated for agriculture.Subsequently, there was a significant increase in 2017, with a total allocation of IDR 179,560,000.00,reflecting a 16% increase.However, the allocation declined in 2018 to IDR 69,996,650.00 or 10.7% of the funds.Notably, a substantial increase was observed in 2019, with an allocation of IDR 347,194,400.00,constituting 25.4% of the total village funds dedicated to agricultural development.The following distribution highlights the allocation of village funds in Sungai Arang Village and Panggungharjo Village.The allocation of village funds in Panggungharjo Village, Sewon District, Bantul Regency, Yogyakarta Special Region, from 2016 to 2019 also exhibits a similar phenomenon.The village funds budget is utilized for infrastructure development and the enhancement of human resources in the agricultural sector.When compared to Sungai Arang Village, the allocation of village funds in Panggungharjo Village is more diverse.
This disparity arises due to the distinct agricultural conditions in both villages.Sungai Arang Village primarily focuses on plantation crops, whereas Panggungharjo Village predominantly cultivates food crops.The supporting agricultural infrastructure also varies between the two villages, resulting in the adjustment of village funds allocation to cater to the specific conditions and needs of each area.Furthermore, it is evident in both villages that the allocation of village funds is predominantly directed towards physical infrastructure development, with limited emphasis on human resource development in agriculture.The following details provide a breakdown of the agricultural programs and activities in Panggungharjo Village, Sewon District, Bantul Regency, Yogyakarta Special Region.

The role of village funds in agricultural development
[9] The Ministry of Villages, Disadvantaged Regions, and Transmigration (2022) asserts that the village funds play a pivotal role in enhancing the productivity and income of rural farmers.Notably, the allocation of village funds has led to a substantial increase in paddy production in villages, ranging from 15.8% to 24%.The highest percentage increase was observed in developing villages (24%), followed by disadvantaged villages (16.8%) and advanced villages (15.8%).Concerning income improvement, disadvantaged regions experienced a noteworthy increase of 12.8% to 88%, while developing villages achieved an impressive growth of 168.3%.Advanced villages, however, witnessed a modest income increase ranging from 7.0% to 25%.These significant variations can be attributed to the perceived benefits of village funds in developing villages, particularly in the realm of improving and upgrading existing infrastructures.The availability of superior facilities and infrastructure has had a positive impact on agricultural activities, thereby facilitating and supporting farming endeavors.Conversely, disadvantaged villages suffer from limited infrastructure development, while advanced villages already boast well-established infrastructural systems.
Analysis of the aforementioned data indicates that village funds, primarily allocated for agricultural development, are predominantly utilized for both physical and non-physical infrastructural enhancements.The indirect impact of village funds on agriculture is evidenced by increased production and income levels.This indirect effect stems from the development of infrastructural elements such as village roads, farm roads, reservoirs, irrigation networks, drainage systems, and embankments.The direct influence of village funds can be observed through knowledge and skill enhancement programs, promotional initiatives for agricultural products, and the strengthening of farmer institutions.Pertinent programs and activities encompass training in appropriate technologies, demonstration plot development, livestock feed training, compost fertilizer training, among others.Despite these efforts, the proportion of agricultural development in the aforementioned villages remains below the 50% threshold.The majority of allocated funds are still directed towards infrastructural enhancements within the agricultural sector.Although there has been a gradual increase, aspects pertaining to community empowerment remain relatively underdeveloped.This phenomenon is also discernible in Windujaya Village.[17] Conducted research indicating that the village funds earmarked for community empowerment amounted to Rp. 306,141,500.00,with Rp. 303,670,000.00allocated specifically for the agricultural and livestock sub-sector.The provision of such funding is anticipated to improve the living standards of farmers and livestock keepers in Windujaya Village.
The tangible impact of village funds in agricultural development is already palpable within rural communities.The consequences become perceptible as development initiatives progress seamlessly and infrastructural improvements continue to materialize.This progression significantly supports increased agricultural yields and the empowerment of rural communities [14].The discernible impact of village funds can be expounded upon as follows:

Enhancing agricultural business operations
The program or activities related to agricultural infrastructure development in Panggungharjo Village exhibit greater diversity compared to Sungai Arang Village.In Sungai Arang Village, the focus is primarily on the construction of drainage systems and agricultural plantation roads.Conversely, in Panggungharjo Village, the scope of infrastructure development encompasses the establishment of embankments, drainage systems, irrigation networks, water retention facilities, and agricultural access roads.This distinction arises from the differing agricultural practices in the two villages.Panggungharjo Village is predominantly engaged in paddy rice cultivation, whereas Sungai Arang Village is primarily involved in plantation agriculture.
The development of agricultural infrastructure significantly impacts the efficiency of farming operations, enhances productivity, supports agricultural activities, and ultimately leads to improved income generation.Indirectly, these infrastructure advancements contribute to the overall productivity of rural agricultural practices.For instance, a study conducted in Tetehosi Sorowi Village highlighted the critical importance of constructing farm roads to streamline farming activities within the community [18].The existing rudimentary footpaths utilized by farmers pose substantial challenges, thereby impeding their agricultural endeavors.Consequently, the development of agricultural road infrastructure instills a sense of enthusiasm among farmers, as they can conveniently access their farmland using vehicles.
In the context of Merangin Regency, the construction of farm roads proves highly advantageous for rubber farmers, as it facilitates transportation and streamlines their agricultural pursuits.Tabir Ulu District boasts an expansive rubber plantation spanning an area of 2,488 hectares.Given the substantial plantation area, the provision of necessary facilities and infrastructure becomes imperative to facilitate farming activities within the community [19].
In the past, farmers encountered significant transportation constraints that incurred exorbitant costs and time delays in carrying out their agricultural activities.During the transportation of agricultural produce, frequent damages and losses were incurred due to the poor condition of existing roads.The transportation bottlenecks led to escalating transportation expenses.However, with the implementation of farm road development projects, farmers have witnessed noteworthy improvements in productivity, coupled with reduced transportation costs associated with their agricultural produce.

Enhancing capacity and institutional development
The utilization of village funds for capacity and institutional development programs remains relatively limited.In Panggungharjo Village, there is a greater diversity of activities aimed at enhancing the capacity of the community compared to Sungai Arang Village.These activities primarily focus on knowledge and skill development, particularly within the agricultural sector.They encompass a range of training programs, empowerment initiatives, and developmental endeavors.Farmer training initiatives include agricultural training, feed production training, appropriate technology training, and the establishment of demonstration plots.The improvement of institutional frameworks among farmers is pursued through targeted training programs, specifically addressing group empowerment and cohesion.
While the impact of capacity and institutional development is noteworthy, it is comparatively less pronounced than that of agricultural infrastructure development.Nevertheless, it is still discernible within the community as it enhances skill sets, subsequently contributing to increased household income.Notably, research conducted demonstrates the positive impact of utilizing village funds for empowerment programs in Sebakung Taka Village, exemplified by training activities pertaining to the production of fish cracker snacks and the promotion of local products through communal groups.These initiatives have proven instrumental in fostering economic growth within the community [12].
The design and implementation of these training programs are geared towards enhancing skills and maximizing the value of local agricultural products.Consequently, the allocation of village funds for empowerment programs should be meticulously planned, taking into account the untapped potential of the community, particularly in areas that have yet to be fully harnessed.It is expected that these planned empowerment programs, accompanied by appropriate budget allocations, will effectively target specific needs and generate positive outcomes for the community at large [17].

Enhancing the development of agricultural support activities
The development of agricultural support activities encompasses both direct and indirect interventions aimed at bolstering the agricultural sector.Direct support activities involve initiatives such as providing high-quality seedlings, facilitating fertilizer procurement, and promoting bird's nest cultivation.On the other hand, indirect support activities involve activities such as promoting and showcasing agricultural products within Panggungharjo Village.
The development of supporting activities for agricultural advancement should prioritize the enhancement of the village's flagship products or the rural area's (prukades) agricultural potential, as well as the establishment and growth of BUMDesa.The successful development of BUMDesa is closely intertwined with the economic prosperity of the village, necessitating well-tailored programs based on the unique needs and capabilities of each community.It is crucial to note that supporting agricultural activities continuously evolve and diversify over time.
A noteworthy example of agricultural enterprise development is the implementation of communal livestock enclosures in Sumberejo Village.By establishing these communal enclosures, farmer group members are empowered to expand their agricultural ventures beyond traditional crop cultivation, thereby opening up new avenues for entrepreneurial opportunities.This additional agricultural endeavor leverages existing resources and potential, contributing to the sustainable growth of the local economy [10].
The utilization of village funds in agricultural development is primarily manifested in the direct enhancement of agricultural infrastructure.However, the full potential of capacity building and supportive activities has yet to be fully realized due to limited budget allocations.
[20] The village fund policy for the year 2021 aims to optimize implementation and bolster economic recovery, with a focus on prioritized sectors.Among these sectors, agricultural resilience takes precedence, encompassing food security and animal husbandry tailored to the unique characteristics of each village.This entails promoting the cultivation of crops, fostering fisheries and livestock farming, including cattle husbandry, within rural communities.Revitalizing the village economy involves empowering small and medium enterprises (SMEs) and fortifying the agricultural sector.Therefore, it is crucial that the allocation of village funds for agricultural development progressively shift towards fostering productive endeavors.In self-sustaining villages, such initiatives can be strategically planned and implemented alongside a reduced emphasis on infrastructure development, ensuring a comprehensive and sustainable approach to advancing agricultural practices.

Conclusion
In the pursuit of rural development through the utilization of village funds, the government has allocated a portion of these funds towards the advancement of the agricultural sector.This allocation stems from the recognition that agriculture continues to hold a prominent position as the primary economic activity in rural areas.The role played by village funds in agricultural development encompasses several key aspects, namely: facilitating the smooth operation of farming activities, enhancing the capacity and institutional framework, and fostering the growth of complementary agricultural initiatives.These multifaceted roles are expected to yield positive outcomes such as increased productivity, enhanced income generation, and improved well-being for farmers.However, it is noteworthy that the current allocation of village funds primarily emphasizes the development of physical infrastructure, while investments in human resources remain relatively modest.To ensure a more comprehensive approach, future efforts should strive for a better balance between physical infrastructure development and the cultivation of human capital.Such a holistic approach is essential for realizing the overarching vision of bolstering food security through the empowerment of small and medium enterprises (SMEs) and the agricultural sector within rural communities.

[ 7 ]
Regulation of the Minister of Villages, Disadvantaged Regions, and Transmigration Number 21 of 2015, regarding the prioritization of village fund utilization, stipulates that village funds are primarily allocated to finance village programs and activities related to village development and community empowerment.Additionally, [8] Regulation of the Minister of Home Affairs of the Republic of Indonesia Number 114 of 2014 defines village development as an endeavor to improve the quality of life and maximize the welfare of rural communities.Village funds play a crucial role in financing governance implementation, development endeavors, community development initiatives, and community empowerment.

Fig. 1 .
Fig. 1.Graph of Village Funds in 2015 -2019 (Trillion Rupiah) Source: Processed from Village Funds Policy Report of the Ministry of Finance of the Republic of Indonesia (2021)

Table 1 .
Distribution of Village Funds for Agricultural Development 2015 -2019 in Sungai Arang Village and Panggungharjo Village [15] [16] Source: Processed from the Realization Report on the Use of Village Funds in Panggungharjo Village & Febrian and Ernawati (2022)Based on the data, the village funds allocation in Sungai Arang Village, Bungo Dani Subdistrict, Bungo Regency, Jambi, as well as in Panggungharjo Village, Sewon District, Bantul Regency, Yogyakarta, indicates that the government has allocated a portion of the village funds for agricultural development.This demonstrates the government's concern for strengthening food security through rural development in the agricultural sector.The allocation of village funds in these two areas fluctuates as it is adjusted according to the priority scale of various sectors managed by each village every year.The distributed village funds for agricultural development are allocated for infrastructure development and human resource development.Many programs have been implemented in Sungai Arang Village during 2016-2019.Here is a list of the village funds allocation programs in Sungai Arang Village, Bungo Dani Subdistrict, Bungo Regency, Jambi Province.

Table 2 .
Allocation of Village Funds for Agricultural Development in 2016-2019 in Sungai Arang Village, Bungo Dani Subdistrict, Bungo Regency, Jambi Province

Table 3 .
Allocation of Village Funds for Agricultural Development in 2016-2019 in Panggungharjo Village, Sewon District, Bantul Regency, Yogyakarta Province Source: Processed from the Realization Report on the Use of Village Funds in Panggungharjo (2020)