Acording to agricultural cencus data, the percentage of small farms (holding <0.5 ha) has
increased from 48.5% in 1993 to 56.5% in 2003. Evidence from micro panel data is also
inline with this observation. In rice farming region of Java, average farm size has declined
from 0.49 ha in 1995 to 0.36 ha in 2007. In the off-Java region, average farm size declined
from 1.49 ha in 1995 to 1.35 ha in 2007. The increasing trend of small farm is due to several
factors, namely: high population presure coupled with limited non-farm employment,
persistent trend of land conversion to non-farm use, and traditional practice of land
inheritance. Due to small farm size, rural farm household have to diversify their income to
meet their family needs. In Java, 51.7% of household income in 2007 is accounted for nonfarm
income. This observation implies that strategic policies to increase household income
in rural areas are by increasing access to land resources coupled with promoting off-farm and
non-farm employment.