Technology Adoption and Economic Exit in Coastal Farming: A Household Model Approach from Yogyakarta, Indonesia

¹ Department of Agribusiness, Faculty of Agriculture, Universitas Muhammadiyah Yogyakarta, Indonesia
² Agricultural Economics Study Program, Faculty of Economics and Management, IPB University, Indonesia
³ Agribusiness Management Study Program, Department of Economics and Business, Lampung State Polytechnic, Indonesia
⁴ Research Center for Behavioral and Circular Economics, National Research and Innovation Agency, Indonesia
⁵ School of Business, IPB University, Indonesia
⁶ Department of Agribusiness, Faculty of Agriculture, Universitas Sarjanawiyata Tamansiswa, Indonesia

^* Corresponding author: muhammad.fauzan@umy.ac.id

Abstract

Coastal agriculture in Indonesia faces unique environmental and economic challenges, which shape farmers’ decisions to adopt or abandon farming technologies. This study investigates two interrelated aspects: the current adoption status of coastal farming technologies and the economic conditions that rationally trigger household exit from coastal agriculture. Using data from 196 coastal farming households in Yogyakarta, we construct and analyze a technology adoption index among farmer households. Subsequently, we develop a household economic model using a system of simultaneous equations to simulate behavioral responses under multi-factor economic pressure. Simulation scenarios involve gradual shocks to key variables, including output price declines, input cost increases, rising wages for hired labor, and shrinking availability of household labor. The results reveal an average technology adoption index of 65.35%, with most farmers adopting at a moderate level and few achieving sustained adoption. Under extreme economic pressure, where output prices drop by 70%, seed costs rise by 80%, hired labor wages increase by 60%, and household labor availability declines by 60%, farming households completely exit coastal agriculture. This total dis-adoption reflects a rational economic response, emphasizing the urgency of policies that enhance household resilience and mitigate compounded economic stress in vulnerable coastal zones.