Understanding Village Economy from Various Versions

Understanding Village Economy from Various Versions

Economics is a human activity related to the distribution, production, and consumption of goods and services. In the past, economic activity only occurred in urban areas. However, over time, activities related to the economy have penetrated rural areas. So that in the modern era a new term appears called village economy. The following is an understanding of the village economy from various versions.

1. According to the Big Indonesian Dictionary
According to the Big Indonesian Dictionary, the definition of village economy is an economy based on production from rural areas which are usually traditional. Production results from rural areas are generally in the form of agricultural products for village locations on the mainland and in the form of marine products for village locations on the coast. All production results will later aim to build the rural economy
In the modern era, production from rural areas is not only limited to the agricultural and marine sectors. Rather, it can be the result of skills in converting traditional objects into goods that have a high selling value. For example, coconut shells that used to be only used as traditional fuel can now be used as decorations in homes that have a high selling value.

2. According to W. Richard Scott
Scott is an American sociologist. In his book entitled Organization: National, Rational and System, it is stated that the definition of village economy is a village area that has economic activities with farmers as its foundation. The profession of a farmer in this case is not only someone who works in the fields. According to Scott, a fisherman who works in the sea is also a farmer.

Village areas make farmers the foundation of the economy because the center of the source of activity in the economic system (transactions, consumption, production, distribution) comes from farmers. This theory arises because the villagers generally work as farmers. Thus, the role of a farmer also affects the flow of the economy in a village.

3. According to the law
Law number 6 of 2014 concerning villages states that the definition of village economy is activity, consumption, production, and investment in rural communities which are determined by the family simultaneously. Each adult member of the family contributes to the family income. The essence of the snippet of the law is to explain the wheels of the village economy that come from each family.

That is, economic activities in rural communities have the aim of prospering the family. Therefore, activities that contain economic principles all start from the family sphere, and eventually can spread among non-family members. Such as traders, government circles, to factory workers, and so on.

4. According to Suhardjo
In his book entitled Rural Geography An Anthology (2008), Suhardjo explains that the definition of village economy is a variety of activities containing economic elements that can be the foundation for the economic cycle in a village. This means that the activities in question are not only limited to the profession of farmers. This statement is considered in accordance with the description of the current rural conditions.

With the development of technology, rural communities do not only dwell on the profession of farmers and fishermen. Because various kinds of industrial sectors, such as tourism and creative industries, can now be the foundation for increasing the economy in a village. As this sector develops, employment opportunities in a village become more varied

5. According to Students
A student of the economics faculty of Brawijaya University Malang, Zainal Asrori said that village economy is a system based on activities related to economic activities, with the aim of improving the economy in a village. A systematic order in an activity of distribution, production, etc. The economic system aims to improve village welfare.

The intended economic system, for example, is the sale and purchase of products originating from the village not only for personal gain, but part of the profit a few percent will be donated to the progress of the village area. The proceeds from the donation will later be used to develop small and medium-sized businesses that have the potential to be developed

Various kinds of theories of understanding the village economy are different and increasingly widespread, making a sign that the village community is basically more advanced in terms of managing its economy. This is inseparable from technological developments that can reach rural areas. So that the development of an increasingly advanced society will also affect the economic cycle on a national scale.


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