Strengthening Rural Economies Through Integrated Agriculture: Evidence from Southeast Aceh Using Input–Output Modeling

Abstract

Rural economic areas in Southeast Aceh District face persistent development challenges, including low agricultural productivity, limited infrastructure, and economic disparities. This study proposes an Integrated Agricultural Model (IAM)—a synergistic approach that aligns crop production, livestock, and agro-industry—to foster rural transformation. Utilizing input–output modeling, forward–backward linkage analysis, and a Vector Error Correction Model (VECM), the study quantifies sectoral multipliers and dynamic interactions among agricultural output, the Farmer Exchange Rate (NTP), and rural GDP. The methodological framework combines secondary data (2015–2022) from the Central Bureau of Statistics (BPS) with field observations from 120 farmers across four districts. Results show that crop production exhibits the highest output multiplier (1.85), and agroindustry investments significantly enhance economic diversification. The VECM confirms that increases in agricultural output and NTP positively influence long-term rural GDP. Preliminary implementation of the IAM led to a 20% increase in farmer incomes, improved soil health, and higher community participation in agro-enterprises. These findings highlight the importance of integrated systems and inter-sectoral coordination as pathways to inclusive, sustainable development. The IAM provides a replicable model for rural transformation applicable across developing regions.