The Influence of Empowerment towards Agricultural Business Actors’ Ability in Surakarta, Indonesia

Abstract

The situation of micro, small, and medium enterprises (MSMEs) in agriculture in Surakarta after the pandemic are still worrying; thus, effective empowerment efforts are needed to revive and develop MSMEs in agriculture. Empowerment will be maximally successful if various resources are available for its implementation. This study aimed to directly and indirectly analyze the effect of empowerment, human capital, economic capital, actors’ perceptions of their business, and financial capital on the ability of agricultural business actors. This research study used quantitative methods with survey techniques. The sample population of this research study included all agricultural business actors in Surakarta covering five districts, and the sample was taken randomly. The data collection techniques included direct interviews, observations, and focus group discussions. The results showed that empowerment has a significant direct effect on economic capital, increasing it by 21.6 percent, and a very significant positive direct effect on the ability of agricultural business actors, increasing it by 20.9 percent. Empowerment has no significant direct effect on human capital, perception, and financial capital. Economy capital and perceptions of business actors have very significant direct effects on the ability of business actors, at 23.1 percent and 37.2 percent, while human capital and financial capital have no direct effects on the ability of business actors. Indirect empowerment via human capital, economic capital, perception, and financial capital factors has no significant effect on the ability of agricultural business actors.