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Journal of Islamic Economics Lariba
(P-ISSN 2477-4839 E-ISSN 2528-3758)
2024, Vol. 10, No. 2, 927-950
https://doi.org/10.20885/jielariba.vol10.iss2.art17
Contact: Iqbal Fahri Tobing iqbalfahritobing@gmail.com
This is an Open Access article distributed under the terms of the Creative Commons Attribution-ShareAlike 4.0 International (CC
BY-SA 4.0) License (https://creativecommons.org/licenses/by-sa/4.0/).
PUBLISHER’S NOTE: Universitas Islam Indonesia stays neutral with regard to jurisdictional claims in published maps and
institutional affiliations.
The role of the agricultural sector in increasing
economic growth from an Islamic economic
perspective: A study in Deli Serdang Regency,
North Sumatera Province, Indonesia
Iqbal Fahri Tobing, Maryam Batubara , & Yusrizal
Program Studi Ekonomi Syariah (S2), Universitas Islam Negeri Sumatera Utara Medan,
Medan, Indonesia
ABSTRAK
Introduction
The agricultural sector is vital for economic growth in agrarian
regions, particularly in Indonesia. Despite its substantial contributions
to employment, food security, and regional GDP, the sector faces
systemic challenges, including limited technological adoption and
inadequate infrastructure. Islamic economics, emphasizing equity,
sustainability, and social welfare, offers a promising framework for
addressing these challenges.
Objectives
This study explores the role of the agricultural sector in promoting
economic growth in Deli Serdang Regency, North Sumatra, from the
perspective of Islamic economics. It aims to assess the impact of
government interventions and the potential of Islamic financial
instruments, such as zakat and waqf, in enhancing agricultural
productivity and sustainability.
Method
A qualitative descriptive approach incorporated field observations,
semi-structured interviews, focus group discussions, and document
analysis. Data were analyzed using interactive qualitative analysis to
identify themes and patterns, supported by triangulation to ensure
reliability.
Results
The findings reveal that agriculture remains a cornerstone of
economic stability in Deli Serdang, contributing significantly to
employment and regional development. Government interventions,
including subsidies, infrastructure investments, and training
programs, have improved productivity but face challenges in
equitable implementation. Islamic economic principles, particularly
the use of zakat and waqf, offer transformative potential by
JEL Classification:
L21, L26, L84, Z12
KAUJIE Classification:
C54, H42, H65, P0
ARTICLE HISTORY:
Submitted: December 11, 2024
Revised: December 30, 2024
Accepted: December 30, 2024
Published: December 30, 2024
KEYWORDS:
agricultural sector; Deli
Serdang Regency; economic
growth; Indonesia; Islamic
economic perspective; North
Sumatera Province
COPYRIGHT © 2024 Iqbal
Fahri Tobing, Maryam
Batubara, & Yusrizal. Licensee
Universitas Islam Indonesia,
Yogyakarta, Indonesia.
928 Tobing et al.
addressing financial and ethical dimensions of agricultural
development.
Implications
This study highlights the need for a synergistic approach that
integrates Islamic economics with government policies to revitalize
agriculture sustainably. The findings contribute to the discourse on
ethical and inclusive economic development, offering practical
insights for policymakers and stakeholders.
Originality/Novelty
By integrating Islamic economic principles into agricultural
development analysis, this study provides a unique framework for
addressing systemic challenges while promoting sustainability and
inclusivity in agrarian economies.
CITATION: Tobing, I. F., Batubara, M., & Yusrizal. (2024). The role of the
agricultural sector in increasing economic growth from an Islamic
economic perspective: A study in Deli Serdang Regency, North
Sumatera Province, Indonesia. Journal of Islamic Economics Lariba,
10(2), 927-950. https://doi.org/10.20885/jielariba.vol10.iss2.art17
INTRODUCTION
Indonesia, as one of the world's leading agrarian nations, possesses abundant natural
resources, ranging from fertile agricultural land to diverse ecosystems (Clough et al.,
2016; Henley, 2008; Nugroho et al., 2022). These resources form a solid foundation for
economic development and food security, particularly through the agricultural sector.
Despite rapid urbanization and industrialization, agriculture remains a critical sector,
employing a significant portion of the population and contributing to national GDP.
Historically, agriculture has also been the backbone of rural livelihoods, promoting
economic stability and reducing poverty (Adebayo et al., 2021; Fuglie, 2004; Liu &
Yamauchi, 2014; Manning, 2000; Prastiyo et al., 2020; Tran et al., 2017). However, global
shifts in economic priorities have often marginalized this sector, emphasizing the
urgent need for its revitalization. Numerous studies have underscored agriculture’s
strategic importance, highlighting its contributions to food sovereignty, raw material
supply for industries, and socio-economic equity in Indonesia's vast archipelago.
Recent literature has drawn attention to the multi-dimensional role of agriculture
in economic systems. For example, some studies emphasized the sector's ability to
absorb labor and provide a social safety net, particularly during economic crises
(Jayasuriya & Shand, 1986; Setiawan, 2016; Silvey, 2001; Sparrow et al., 2020; Thorbecke,
1991; Yamauchi, 2016). Likewise, other studies highlighted agriculture's role in driving
regional GDP growth (Alam et al., 2016; Awokuse & Xie, 2015; Oktavia et al., 2016;
Shahbaz et al., 2013), especially in provinces with abundant agricultural resources
such as North Sumatra. However, its declining share in GDP underscores structural
challenges, including limited technological advancement, insufficient government
support, and inadequate market integration. Addressing these issues has become a
Agricultural sector in Islamic economic perspective 929
national priority, especially given Indonesia's dependence on agricultural exports and
the sector’s potential to bolster economic resilience in the post-pandemic era.
The central issue in this research stems from the agricultural sector's declining
economic contribution, especially in provinces like North Sumatra, where agriculture
historically played a pivotal role. The underutilization of this sector is not just an
economic concern but a socio-political one, as it directly impacts rural livelihoods and
national food security. The challenges faced by the sector include inadequate
government policies, low technology adoption, and a lack of institutional support for
smallholder farmers. These systemic barriers hinder agricultural productivity and
diminish its potential to contribute to regional development effectively. Given this
context, the research explores how integrating Sharia economic principles with
agricultural policies could offer sustainable solutions to these persistent issues.
Islamic economic principles, rooted in values of equity, sustainability, and
collective welfare (Alfaihani, 2024; Asutay, 2013; Kader, 2021), provide a unique
framework for addressing challenges in agriculture. Several studies have examined
how these principles could be applied to enhance agricultural productivity and
economic growth. For instance, some studies noted that investments in agriculture
aligned with Sharia principles could promote equitable resource distribution and
sustainable practices (Yasmeen et al., 2024; Zain et al., 2024). Similarly, Nasution &
Yusuf (2018) highlighted the compatibility of Islamic values with modern economic
goals, advocating for policies that prioritize social welfare over short-term profits.
These insights suggest that integrating Islamic economics with agricultural
development could address systemic inefficiencies while promoting ethical practices.
Previous research has also provided specific solutions for improving agricultural
productivity and economic impact. Government interventions, such as providing
subsidies and technological support, are crucial for revitalizing the sector (Heliaantoro
& Juwana, 2018; Hidayati et al., 2016; Lubis et al., 2024; Sudjono, 2011). Additionally, other
studies demonstrated the effectiveness of community-based agricultural programs
in fostering rural development and economic stability (Hasibuan et al., 2022; Surya et
al., 2020; Watts et al., 2019; Wibowo et al., 2013; Wulandari & Inoue, 2018). These
initiatives align with Sharia principles by emphasizing collective responsibility,
equitable resource allocation, and sustainability. Furthermore, other studies
underscored the importance of agro-industrial integration, which not only adds value
to agricultural products but also creates employment opportunities and stimulates
regional economic growth (Dewi et al., 2022; Fatah, 2007; Neilson et al., 2020; Ruml et
al., 2022; Sarma et al., 2022).
The current body of literature highlights several gaps that this research aims to
address. While many studies focus on technical and economic aspects of agriculture,
few examine the integration of Sharia principles in agricultural development
comprehensively. Additionally, the specific challenges faced by regions like Deli
Serdang in North Sumatra, which possess significant agricultural potential but face
structural and policy-related barriers, remain underexplored. The interplay between
religious principles and economic practices in shaping sustainable development
930 Tobing et al.
strategies is another area that requires further investigation. This study seeks to bridge
these gaps by providing an in-depth analysis of the agricultural sector's role in
economic growth from an Islamic economic perspective.
This research aims to explore the potential of integrating Sharia economic
principles into the agricultural sector to enhance its contribution to economic growth
in Deli Serdang Regency, North Sumatra. The study’s novelty lies in its focus on the
intersection of religion and economics, providing a holistic approach to addressing
agricultural challenges. By combining qualitative case studies with theoretical insights
from Islamic economics, this research offers a unique perspective on sustainable
development. The findings are expected to contribute not only to academic discourse
but also to practical policy-making, providing a roadmap for revitalizing Indonesia’s
agricultural sector in alignment with ethical and economic goals.
LITERATURE REVIEW
The Role of the Agricultural Sector in Economic Growth
Agriculture remains a cornerstone of economic development, particularly in agrarian
economies such as Indonesia. The sector plays a multifaceted role by providing food
security, generating employment, and acting as a critical contributor to GDP.
Agriculture directly impacts economic growth by serving as a significant source of
income for rural communities and a provider of raw materials for industries
(Haggblade et al., 2002, 2010; Loizou et al., 2019; Ratag et al., 2016; Sari & Bangun, 2019;
Tampun et al., 2015). The sector's ability to sustain labor markets, particularly in rural
areas, further underscores its economic significance. For instance, Deli Serdang
Regency in North Sumatra benefits from agriculture’s contributions to employment
and regional GDP, demonstrating the sector’s pivotal role in supporting economic
stability.
The economic contribution of agriculture extends beyond its immediate outputs.
As highlighted previous studies, agricultural activities stimulate other sectors,
including manufacturing and trade, by providing essential inputs and creating
demand for industrial products (Dethier & Effenberger, 2012; Johnston & Mellor, 1961;
Oktavia et al., 2016; Pingali & Rosegrant, 1995). This interconnectedness fosters a
synergistic relationship between agriculture and other economic sectors, thereby
amplifying its impact on national and regional development. Furthermore, empirical
evidence from various regions in Indonesia suggests that robust agricultural
performance can act as a buffer during economic crises, stabilizing income levels and
ensuring food availability.
However, despite its evident importance, agriculture's share in GDP has been on a
gradual decline. This trend is often attributed to structural changes in the economy,
including shifts toward industrialization and services. Nonetheless, the sector remains
indispensable for ensuring equitable development and addressing rural poverty.
Some studies emphasize that investing in agriculture can yield long-term economic
benefits, particularly when aligned with sustainable practices and inclusive policies
(Adenle et al., 2018; Lefore et al., 2021; Nasution & Yusuf, 2018; Piñeiro et al., 2020).
Agricultural sector in Islamic economic perspective 931
The Role of Government in Enhancing Agricultural Growth
Government intervention is crucial in optimizing the agricultural sector's potential.
Policies that address structural barriers, improve access to resources, and enhance
technological adoption can significantly boost productivity and economic
contributions. Effective governmental support includes providing subsidies (Indriasari
& Sani, 2019; Lepa et al., 2019), facilitating access to credit (Rozci & Laily, 2023;
Sholikhati, 2023), and investing in infrastructure such as irrigation systems and
storage facilities (Bahri et al., 2021; Elmanuah & Santoso, 2024; Nuraisyah Nst et al.,
2024). These measures not only improve agricultural outputs but also enhance the
sector’s resilience to external shocks, such as climate change and market fluctuations.
One of the key areas where government intervention is critical is in the
dissemination of modern agricultural technologies. Technological advancements in
agriculture, such as precision farming (Chlingaryan et al., 2018; Weiss, 1996; N. Zhang
et al., 2002) and sustainable irrigation systems (Khan et al., 2006; Levidow et al., 2014;
Oweis & Hachum, 2006; Playán & Mateos, 2006; Pretty & Bharucha, 2014), can
significantly increase yields and reduce production costs. However, the adoption of
such technologies often requires financial and technical support, which underscores
the need for targeted government programs. Moreover, policies that prioritize
education and training for farmers can bridge the knowledge gap, enabling them to
adopt innovative practices and optimize resource use.
In addition to resource allocation and technological support, governments play a
vital role in creating an enabling environment for agricultural growth. This includes
establishing regulatory frameworks that promote fair trade, ensuring market access
for smallholder farmers, and fostering public-private partnerships. Other studies
emphasize the importance of integrating agriculture with agro-industrial activities
(Dewi et al., 2022; Doronina et al., 2016; Egea et al., 2018; Mukhametgaliev et al., 2020;
Prokhorova et al., 2016; Y. Zhang et al., 2018), which not only adds value to raw
agricultural products but also generates employment opportunities and stimulates
regional economic growth.
Islamic Economic Perspective on Agriculture and Its Impact on Growth
Islamic economics offers a unique framework for understanding and enhancing the
agricultural sector’s role in economic development. Rooted in principles of equity,
sustainability, and social welfare, the Islamic perspective emphasizes the moral and
ethical dimensions of economic activities. As highlighted by previous studies
(Imamah et al., 2024; Karman et al., 2023; Muttaqin, 2018; Muzakky et al., 2024; Z. Zuhdi,
2008), agriculture is viewed as both a means of livelihood and a form of worship,
underscoring its spiritual significance in Islamic teachings.
From an Islamic economic standpoint, agriculture is considered a vital
component of societal welfare. Quranic verses and Hadiths frequently emphasize the
importance of cultivating the land, not only for economic benefits but also as an act of
stewardship. The concept of khalifah (stewardship) implies that humans have a
responsibility to care for the earth and use its resources sustainably. This perspective
932 Tobing et al.
aligns with modern sustainability goals, advocating for practices that balance
productivity with environmental preservation.
The integration of Islamic principles into agricultural policies can address
systemic challenges such as inequality and resource mismanagement. Islamic
economics promotes equitable resource distribution and prioritizes the welfare of
marginalized communities (Abbas & Aravossis, 2024; Ali et al., 2024; Khalidin, 2024;
Zauro et al., 2024; F. Zuhdi, 2021; Zulhilmi, 2024), including smallholder farmers.
Mechanisms such as waqf (endowment) and zakat (almsgiving) can be leveraged to
provide financial support for agricultural development, ensuring that resources are
allocated to those most in need.
The impact of Islamic economics on agriculture extends beyond financial
mechanisms. It also influences the broader socio-economic landscape by fostering
ethical practices and community-oriented development. Previous studies (Muthoifin
et al., 2024; Nasution & Yusuf, 2018; Obaidullah, 2015) highlight that agricultural policies
grounded in Islamic principles can promote social cohesion and reduce disparities,
contributing to more inclusive economic growth. Additionally, the emphasis on
sustainability and accountability in Islamic economics aligns with global efforts to
address climate change and ensure food security.
Bridging the Gaps in Existing Literature
While the existing body of literature underscores the critical role of agriculture and the
importance of governmental and ethical frameworks, several gaps remain
unaddressed. For instance, most studies focus on technical and economic
dimensions, with limited exploration of how Islamic principles can be systematically
integrated into agricultural policies. Furthermore, there is a lack of region-specific
analyses that consider unique socio-economic and cultural contexts, such as those in
Deli Serdang Regency.
This study seeks to fill these gaps by examining the intersection of Islamic
economics and agricultural development in a localized context. By integrating
theoretical insights with empirical data, the research aims to provide a
comprehensive understanding of how the agricultural sector can be revitalized to
support sustainable economic growth. The findings are expected to contribute to both
academic discourse and practical policy-making, offering a roadmap for aligning
agricultural practices with ethical and economic goals.
METHOD
Research Approach
This study employs a qualitative descriptive approach, aiming to provide an in-depth
understanding of the agricultural sector's role in economic growth from the
perspective of Islamic economics. Qualitative research is particularly suitable for
exploring complex social, economic, and cultural phenomena, allowing the researcher
to examine relationships, processes, and contextual factors. The descriptive
component enables a detailed depiction of the dynamics within the agricultural
Agricultural sector in Islamic economic perspective 933
sector in Deli Serdang Regency, North Sumatra. Furthermore, the research adopts a
case study approach, focusing on this specific region to gain localized insights while
addressing broader theoretical questions.
Research Location and Duration
The research was conducted in Deli Serdang Regency, a region in North Sumatra
known for its substantial agricultural potential and contributions to the provincial
economy. Covering an area of 2,497.72 square kilometers, Deli Serdang is
characterized by diverse agricultural activities, including crop production, horticulture,
and livestock farming. This location was selected due to its representative significance
in showcasing the challenges and opportunities within Indonesia’s agricultural sector.
The study spanned a duration of six months, allowing adequate time for data
collection, analysis, and validation.
Research Subjects and Scope
The study focuses on three primary groups of subjects:
1. Government officials, particularly representatives from the Department of
Agriculture in Deli Serdang, to provide insights into policies, programs, and
challenges faced by the sector.
2. Farmer groups and individual farmers actively engaged in agricultural
activities to understand their experiences, practices, and perspectives.
3. Community stakeholders, including local agricultural cooperatives and trade
associations, to explore the broader socio-economic impacts of agricultural
policies.
By encompassing a diverse range of participants, the study aims to capture the
multifaceted nature of the agricultural sector and its interplay with Islamic economic
principles.
Data Sources
Data for the study were collected from both primary and secondary sources. Primary
data were obtained through field observations, interviews, and focus group
discussions with the aforementioned subjects. These interactions were designed to
elicit detailed responses regarding the role of agriculture, government interventions,
and the application of Islamic economic principles. Secondary data included official
government reports, agricultural statistics, academic articles, and other relevant
documents to provide contextual and theoretical support for the analysis.
Data Collection Techniques
1. Field Observations
Field observations were conducted to gain a first-hand understanding of
agricultural practices and their socio-economic implications. This involved
visiting farms, irrigation systems, and local markets to observe processes and
interactions within the agricultural value chain.
934 Tobing et al.
2. Semi-Structured Interviews
Interviews were conducted with key informants, including government officials,
farmer group leaders, and individual farmers. A semi-structured format was
used to allow flexibility in exploring specific themes while ensuring that core
research questions were addressed. This method facilitated a deeper
understanding of participants' experiences and opinions regarding the
integration of Islamic economic principles into agricultural practices.
3. Focus Group Discussions
Focus group discussions were organized with farmer groups to gather
collective insights on common challenges, opportunities, and perceptions.
These discussions also enabled the triangulation of data obtained from
individual interviews.
4. Document Analysis
A thorough review of policy documents, agricultural reports, and academic
literature was conducted to contextualize the primary data and provide a
foundation for analysis. Documents such as the agricultural development plans
for Deli Serdang Regency and national statistics on agricultural performance
were critically analyzed to align empirical findings with existing knowledge.
Data Analysis
The study employed qualitative interactive analysis, a method that integrates data
collection and analysis processes to ensure iterative refinement of insights. This
approach involved four interconnected stages:
1. Data Collection: Gathering detailed and contextual data through the
aforementioned techniques.
2. Data Reduction: Summarizing and categorizing the collected data to identify
key themes, patterns, and relationships.
3. Data Presentation: Organizing the reduced data into coherent formats, such as
tables and narrative summaries, to facilitate interpretation.
4. Conclusion Drawing and Verification: Synthesizing findings to answer the
research questions, supported by iterative validation through member checks
and expert reviews.
Data Validation
To ensure the reliability and validity of the findings, the study incorporated several
strategies:
1. Triangulation: Cross-referencing data from multiple sources, including
interviews, observations, and documents, to enhance accuracy and credibility.
2. Member Checks: Sharing preliminary findings with participants to verify
interpretations and address potential misunderstandings.
3. Peer Review: Engaging academic peers and experts in Islamic economics and
agricultural studies to review the research process and findings.
Agricultural sector in Islamic economic perspective 935
Ethical Considerations
The research adhered to ethical guidelines to protect the rights and welfare of
participants. Informed consent was obtained from all participants, ensuring they were
aware of the study’s objectives, methods, and potential outcomes. Anonymity and
confidentiality were maintained throughout the research process to safeguard
sensitive information. Additionally, the study received approval from relevant
academic and governmental institutions, ensuring compliance with ethical standards
and local regulations.
RESULTS
Overview of the Agricultural Sector in Deli Serdang Regency
Deli Serdang Regency, located in North Sumatra, plays a pivotal role in the region's
agricultural output, contributing significantly to the province's economic stability and
growth. Covering a vast area of 2,497.72 square kilometers, the regency is endowed
with fertile soil and a climate conducive to diverse agricultural activities, including the
cultivation of crops, horticulture, and livestock farming. The agricultural sector serves
as a primary source of employment and income for a substantial portion of the
population, accounting for 14.17% of the labor force in 2020. Despite its strategic
importance, the sector faces challenges, including limited technological adoption,
inadequate infrastructure, and fluctuating market conditions.
The agricultural sector's contribution to the Gross Regional Domestic Product
(GRDP) of Deli Serdang has been noteworthy, even though its relative share has seen
a decline due to structural shifts in the economy. According to regional statistics,
agriculture remains one of the leading contributors to the GRDP, underlining its
centrality in the local economy. This dual role of providing economic stability and
serving as a significant employer underscores the sector’s potential to drive
sustainable growth, provided its challenges are adequately addressed.
The Role of the Agricultural Sector in Economic Growth
Agriculture in Deli Serdang serves as a cornerstone of the local economy,
demonstrating its capacity to support regional development through multiple
channels. First, the sector ensures food security by supplying staple crops such as rice,
maize, and horticultural produce. The steady availability of these commodities not
only fulfills local demand but also supports regional trade and exports, contributing to
economic stability. Second, the sector’s integration with downstream industries
creates a value chain that amplifies its economic impact. For instance, the production
of palm oil and rubber, key commodities in Deli Serdang, feeds into manufacturing
sectors, thereby creating additional employment and revenue streams.
Third, agriculture serves as a social safety net for rural communities, particularly
during economic downturns. Its resilience during periods of crisis, such as the COVID-
19 pandemic, highlights its role in stabilizing incomes and mitigating the impact of
broader economic contractions. Despite these contributions, the sector faces
936 Tobing et al.
constraints such as outdated farming methods and limited access to credit, which
hinder its full potential.
Government Interventions in Supporting Agriculture
The local government in Deli Serdang has implemented various programs and
policies aimed at bolstering the agricultural sector. Key interventions include providing
subsidies for seeds and fertilizers, facilitating access to affordable credit, and offering
training programs to enhance farmers’ skills. For example, agricultural extension
services have been introduced to disseminate modern farming techniques and
promote sustainable practices. These initiatives aim to address systemic
inefficiencies, improve productivity, and foster resilience against external shocks such
as fluctuating commodity prices and climate variability.
Additionally, infrastructure development has been prioritized to support the sector.
Investments in irrigation systems, storage facilities, and transportation networks have
been made to reduce post-harvest losses and improve market access for farmers.
According to data from the Department of Agriculture, these measures have
contributed to modest improvements in productivity and income levels among
farming communities. However, challenges remain, including the equitable
distribution of resources and the need for better coordination among stakeholders.
The government has also emphasized the importance of integrating agriculture
with other sectors, such as agro-industries, to add value to raw agricultural products.
Policies promoting public-private partnerships have been introduced to attract
investments and foster innovation in the sector. Despite these efforts, the
implementation of government programs often faces bottlenecks, including
bureaucratic inefficiencies and limited reach to remote farming areas.
Islamic Economic Perspective on Agriculture
Islamic economic principles offer a unique framework for addressing the challenges
faced by the agricultural sector in Deli Serdang. The principles of equity, sustainability,
and social welfare inherent in Islamic economics align closely with the objectives of
agricultural development. This study highlights how these principles can be
operationalized to enhance productivity and foster inclusive growth in the sector.
One of the key insights from this perspective is the role of zakat (almsgiving) and
waqf (endowment) as financial instruments to support agricultural development. For
instance, zakat can be utilized to provide interest-free loans to smallholder farmers,
enabling them to invest in modern equipment and sustainable practices. Similarly,
waqf can be employed to develop community-based agricultural infrastructure, such
as irrigation systems and warehouses. These mechanisms not only address financial
constraints but also promote social equity by ensuring that resources are distributed
to those most in need.
The concept of khalifah (stewardship) in Islamic teachings emphasizes the ethical
use of resources and the responsibility to care for the environment. This aligns with the
principles of sustainable agriculture, which aim to balance productivity with
environmental preservation. By integrating these values into agricultural policies and
Agricultural sector in Islamic economic perspective 937
practices, Deli Serdang can create a model of development that is both economically
viable and ethically sound.
Furthermore, Islamic economics advocates for community-oriented
development, which can strengthen social cohesion and foster collective action
among farmers. Initiatives such as cooperative farming and shared resource
management reflect these values, providing a framework for addressing structural
barriers and enhancing the sector’s resilience.
DISCUSSION
The Multifaceted Role of Agriculture in Economic Growth
The findings of this study underscore the integral role of agriculture in the economic
development of Deli Serdang Regency and its broader implications for Indonesia’s
economy. Agriculture acts as a cornerstone of economic stability, providing
employment, ensuring food security, and generating revenue through its integration
with downstream industries. As highlighted by Martauli and Astuti (2021), the sector’s
contributions to Gross Regional Domestic Product (GRDP) and labor absorption make
it indispensable for fostering inclusive growth, particularly in rural areas.
Despite its importance, the declining contribution of agriculture to GRDP reflects
structural challenges, including shifts toward industrialization and inadequate
technological adoption. This trend aligns with national patterns, where agriculture's
share in GDP diminishes as economies diversify. However, this decline does not negate
agriculture's potential as a driver of economic growth. Studies such as those by
Oktavia et al. (2016) emphasize that with strategic interventions, agriculture can act as
a catalyst for regional development by creating value-added opportunities and
supporting industrial growth.
The case of Deli Serdang further illustrates this dynamic. The region’s reliance on
agriculture for employment and trade highlights its vulnerability to systemic
inefficiencies, such as fluctuating commodity prices and limited market access.
Addressing these issues requires a multi-pronged approach that considers both
macroeconomic policies and localized strategies tailored to the region’s unique
socio-economic conditions.
Government’s Role in Enhancing Agricultural Productivity
Government intervention is pivotal in overcoming the barriers faced by the
agricultural sector. In Deli Serdang, the government has implemented various
initiatives, such as providing subsidies, improving infrastructure, and offering training
programs to enhance farmers' productivity. These measures align with the
recommendations of Hasibuan et al. (2022), who argue that targeted support for
smallholder farmers is essential for unlocking the sector’s potential.
One of the critical areas of government involvement is infrastructure
development. Investments in irrigation systems, transportation networks, and storage
facilities have shown promise in reducing post-harvest losses and improving market
accessibility. However, challenges persist, particularly in ensuring the equitable
938 Tobing et al.
distribution of these resources. The rural-urban divide often leaves remote farming
communities at a disadvantage, limiting their ability to benefit from government
programs fully.
Another important aspect is the promotion of technological adoption. As Tamba
et al. (2019) note, modern agricultural technologies, such as precision farming and
sustainable irrigation systems, can significantly boost yields and reduce production
costs. In Deli Serdang, efforts to disseminate these technologies through agricultural
extension services have had a positive impact, although their reach remains limited.
Expanding these programs and integrating them with digital solutions, such as e-
marketplaces, could further enhance their effectiveness.
Moreover, the government’s emphasis on integrating agriculture with agro-
industrial activities reflects a strategic shift toward value-added production. Policies
encouraging public-private partnerships have facilitated investments in processing
facilities, enabling farmers to command better prices for their produce. However, the
success of these initiatives depends on effective coordination among stakeholders
and the removal of bureaucratic bottlenecks.
Islamic Economics as a Framework for Agricultural Development
The application of Islamic economic principles provides a novel framework for
addressing the challenges faced by the agricultural sector. Rooted in values of equity,
sustainability, and social welfare, Islamic economics emphasizes the ethical
dimensions of economic activities, aligning closely with the objectives of sustainable
agriculture. As Mutaqqin (2018) highlights, agriculture is viewed as both an economic
endeavor and a spiritual obligation, underscoring its dual significance in Islamic
teachings.
One of the key contributions of Islamic economics is its focus on financial
inclusion. Mechanisms such as zakat (almsgiving) and waqf (endowment) can be
leveraged to provide financial support to marginalized farmers, enabling them to
invest in modern equipment and sustainable practices. For instance, zakat funds
could be directed toward providing interest-free loans, while waqf could be utilized to
develop community-based infrastructure, such as irrigation systems and warehouses.
These approaches not only address financial barriers but also promote social equity
by ensuring that resources are distributed to those most in need.
The concept of khalifah (stewardship) further aligns Islamic economic principles
with sustainable agriculture. This principle emphasizes the ethical use of resources
and the responsibility to preserve the environment for future generations. By
integrating these values into agricultural policies and practices, Deli Serdang can
create a development model that balances productivity with environmental
sustainability. This approach is particularly relevant in addressing the region’s
vulnerability to climate change and its impact on agricultural outputs.
Furthermore, Islamic economics advocates for community-oriented
development, which can strengthen social cohesion and foster collective action
among farmers. Cooperative farming and shared resource management reflect these
Agricultural sector in Islamic economic perspective 939
values, providing a framework for addressing systemic inefficiencies and enhancing
the sector’s resilience. Studies by F. Zuhdi (2021) and Nasution & Yusuf (2018)
underscore the potential of such initiatives to transform rural economies and promote
inclusive growth.
Challenges in Implementing Sustainable Solutions
While the integration of government interventions and Islamic economic principles
offers a promising framework for agricultural development, several challenges must
be addressed to ensure its success. First, the effective implementation of policies
requires robust institutional capacity and coordination among stakeholders. In Deli
Serdang, bureaucratic inefficiencies and limited outreach to remote communities
often hinder the delivery of support programs. Strengthening local institutions and
enhancing their capacity to manage and monitor agricultural initiatives is essential
for overcoming these barriers.
Second, the adoption of Islamic economic mechanisms, such as zakat and waqf,
requires greater awareness and understanding among stakeholders. While these
instruments have significant potential, their implementation is often constrained by
limited institutional frameworks and a lack of integration with existing policies.
Developing clear guidelines and building partnerships with religious and community
organizations can help operationalize these mechanisms effectively.
Third, the transition to sustainable agricultural practices poses challenges related
to resource availability and farmer capacity. Modern technologies and practices
require initial investments that may be beyond the reach of many smallholder
farmers. Providing targeted financial assistance and training programs can address
these gaps, enabling farmers to adopt innovations that enhance productivity while
minimizing environmental impact.
Opportunities for Future Development
Despite these challenges, the findings highlight several opportunities for revitalizing
the agricultural sector in Deli Serdang. The increasing global demand for sustainable
and ethically produced agricultural goods presents a significant market opportunity
for the region. By aligning agricultural practices with Islamic economic principles and
international sustainability standards, Deli Serdang can enhance its competitiveness
and attract investments.
The integration of technology into agricultural practices also holds promise.
Digital platforms, such as e-marketplaces and mobile-based advisory services, can
bridge the gap between farmers and markets, reducing transaction costs and
improving profitability. Additionally, advancements in precision farming and agro-
processing technologies can address systemic inefficiencies and unlock new revenue
streams for farmers.
Collaboration among stakeholders, including government agencies, private
sector actors, and community organizations, is critical for leveraging these
opportunities. Public-private partnerships can drive innovation and investment in the
940 Tobing et al.
sector, while community-based initiatives can ensure that development benefits are
equitably distributed.
Toward a Holistic Development Model
The findings of this study underscore the need for a holistic and integrated approach
to agricultural development. Combining government interventions with Islamic
economic principles offers a framework for addressing structural challenges while
promoting sustainability and inclusivity. For instance, policies that integrate financial
support mechanisms, such as zakat and waqf, with government subsidies can create
a more equitable development model. Similarly, fostering collaboration among
stakeholders can create synergies that enhance the sector’s overall impact.
In conclusion, the discussion highlights the critical role of agriculture in Deli
Serdang’s economic growth and the potential of Islamic economic principles to
address systemic challenges. By adopting a comprehensive approach that combines
policy interventions with ethical frameworks, the region can unlock the full potential of
its agricultural sector, ensuring sustainable development and improved livelihoods for
its farming communities.
CONCLUSION
This study highlights the critical role of the agricultural sector in driving economic
growth in Deli Serdang Regency, North Sumatra, through the lens of Islamic
economics. The findings demonstrate that agriculture is a cornerstone of regional
development, contributing significantly to employment, food security, and Gross
Regional Domestic Product (GRDP). However, systemic challenges such as limited
technological adoption, inadequate infrastructure, and market inefficiencies hinder its
full potential.
The research further illustrates the transformative potential of Islamic economic
principles, including zakat and waqf, in addressing these challenges. By promoting
financial inclusion, equitable resource distribution, and sustainable practices, Islamic
frameworks align with the goals of inclusive and ethical agricultural development.
Government interventions, such as subsidies and infrastructure investments, are
essential complements to these frameworks, ensuring broader access and impact.
The study contributes to the existing body of knowledge by integrating Islamic
economic principles into the analysis of agricultural policies, offering a holistic model
for sustainable development. Its implications extend to policymakers, highlighting the
need for synergistic strategies that combine ethical values with practical
interventions. Future efforts should focus on scaling innovative practices and fostering
collaboration among stakeholders to further enhance the sector’s contributions.
Limitations of the Study
While this research provides valuable insights into the agricultural sector's role in
economic growth, several limitations warrant acknowledgment. First, the study's
qualitative approach, while offering depth and context, may limit the generalizability
Agricultural sector in Islamic economic perspective 941
of its findings. Data collected from Deli Serdang Regency may not fully represent the
conditions of other regions with different socio-economic or cultural contexts.
Second, the reliance on interviews and focus group discussions could introduce
biases, as participants' responses might reflect subjective perceptions rather than
objective realities. While triangulation methods were employed to mitigate this, the
study would benefit from complementary quantitative analyses to validate and
expand its findings.
Third, the integration of Islamic economic principles, such as zakat and waqf, was
explored conceptually but not operationalized in real-world scenarios. This limits the
study’s ability to provide empirical evidence of their practical effectiveness in
transforming the agricultural sector.
Finally, time constraints limited the exploration of emerging technologies and their
specific applications in the agricultural context of Deli Serdang. These limitations
suggest the need for broader, multi-regional studies incorporating mixed
methodologies to provide a more comprehensive understanding of the issues
addressed.
Recommendations for Future Research
Future research should build on this study by employing mixed-method approaches
that combine qualitative insights with quantitative analyses. This would enhance the
reliability and generalizability of findings, offering a more nuanced understanding of
the agricultural sector's dynamics across different regions.
Studies exploring the operationalization of Islamic economic instruments, such as
zakat and waqf, in agricultural development are particularly needed. Examining their
implementation in real-world contexts could provide empirical evidence of their
feasibility and impact. This would also allow for the development of practical
guidelines for policymakers and stakeholders.
Further, research on the integration of emerging technologies, such as precision
agriculture and digital platforms, could identify scalable solutions to systemic
inefficiencies in rural farming communities. Evaluating their cost-effectiveness and
potential for widespread adoption would be invaluable.
Lastly, interdisciplinary studies combining Islamic economics with environmental
sciences could address the pressing issue of sustainability in agriculture. Exploring the
interplay between ethical frameworks and climate-resilient practices would
contribute to global discussions on sustainable development. These avenues for
future research could significantly enhance the agricultural sector’s role in fostering
inclusive and sustainable growth.
Author Contributions
Conceptualization
I.F.T., M.B., & Y.
Resources
I.F.T., M.B., & Y.
Data curation
I.F.T., M.B., & Y.
Software
I.F.T., M.B., & Y.
Formal analysis
I.F.T., M.B., & Y.
Supervision
I.F.T., M.B., & Y.
Funding acquisition
I.F.T., M.B., & Y.
Validation
I.F.T., M.B., & Y.
Investigation
I.F.T., M.B., & Y.
Visualization
I.F.T., M.B., & Y.
Methodology
I.F.T., M.B., & Y.
Writing – original draft
I.F.T., M.B., & Y.
942 Tobing et al.
Project administration I.F.T., M.B., & Y. Writing –
review &
editing
I.F.T., M.B., & Y.
All authors have read and agreed to the published version of the manuscript.
Funding
This study received no direct funding from any institution.
Institutional Review Board Statement
The study was approved by Program Studi Ekonomi Syariah (S2), Universitas Islam Negeri Sumatera
Utara Medan, Medan, Indonesia.
Informed Consent Statement
Informed consent was obtained before respondents answered the interview.
Data Availability Statement
The data presented in this study are available upon request to the corresponding author.
Acknowledgments
The author thanks Program Studi Ekonomi Syariah (S2), Universitas Islam Negeri Sumatera Utara
Medan, Medan, Indonesia, for administrative support for the research on which this article was
based.
Conflicts of Interest
The author declares no conflicts of interest.
Declaration of Generative AI and AI-Assisted Technologies in the Writing
Process
During the preparation of this work, the authors used ChatGPT, DeepL, Grammarly, and PaperPal to
translate early version of the article from Bahasa Indonesia into American English and to improve the
clarity of the language and readability of the article. After using these tools, the authors reviewed
and edited the content as needed and took full responsibility for the content of the published article.
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