Investigating the Main Determinants of Food Security in Indonesia: Do Islamic Green Financing and Green Lending Play an Essential Role? Sulaeman(a)*, Husnul Mirzal(b), Sri Herianingrum(c)
(a)Doctoral Program of Islamic Economic, Airlangga University, Surabaya, Indonesia
(b)Master of Islamic Economic Science, Airlangga University, Surabaya, Indonesia
(c)Departement of Islamic Economic, Airlangga University, Surabaya, Indonesia
*Corresponding author: sulaeman-2024[at]feb.unair.ac.id
Abstract
The second target of the Sustainable Development Goals (SDGs) to be achieved by 2030 is food security. Funding is one of the essential factors in ensuring national food security. The potential for green financing/lending in Islamic and conventional banking is proposed as a driving factor to achieve national food security in Indonesia. The main objective of this study is to empirically analyze the green financing factors in Islamic and conventional banking on food security in Indonesia. This study was conducted in the form of panel data using 32 provinces in Indonesia for the period 2019 to 2023. Using the panel estimated generalized least squares (Panel-EGLS) method, this study found that both green financing of Islamic banks and green loans of conventional banks have a significant effect on increasing food security in Indonesia. This finding proves that green financing is a major and important determinant in driving national food security. In addition, informal farmers and the human development index contribute to increasing national food security. While the increase in population in each province has an impact on decreasing food security in all provinces in Indonesia. The results of this study also confirmed consistent results through robustness testing. The results of this study have implications for encouraging the Islamic and conventional banking industries in increasing the amount of financing channeled to the agricultural sector and assisting the government in realizing national food security and sustainable agriculture in Indonesia.
Keywords: sustainable agriculture- national food security- green financing- green lending- Islamic banking- conventional banking- Indonesia
