HYPOTHESIS TESTING ON ENVIRONMENTAL KUZNETS CURVE OF AGRICULTURAL SECTOR IN JAVA ISLAND: PANEL DATA ANALYSIS Pengujian Hipotesis Kurva Lingkungan Kuznets (Environmental Kuznets Curve) Sektor Pertanian di Pulau Jawa : Analisis Data Panel

One obstacle in the improvement of community welfare in the agricultural sector, especially in Java, is the environmental externality which constantly exists in every economic activity. The objective of this research was to estimate greenhouse gas emission coming from agricultural sector in Java and identify whether farmers in Java had allocated environmental conservation costs as the impact of greenhouse gas emission from agricultural activities in Java. The inventory method of greenhouse gas emission from agricultural sector is based on inventory guidelines published by IPCC (Intergovernmental Panel on Climate Change) in 2006. As for the analysis to determine the relationship between greenhouse gas emission and GRDP of agricultural subsector per agricultural labor, The Environmental Kuznets Curve (EKC) was employed, alongside greenhouse gas emission indicators representing environmental degradation and GRDP of agricultural subsector per agricultural worker representing of per capita income of agricultural. Overall, greenhouse gas emissions, both CH methane emissions and carbon dioxide emission (CO ) produced from rice cultivation, fertilizer application, livestock enteric fermentation and poultry manure are gradually increasing. And the relationship between greenhouse gas emission and GRDP per worker has inverted-U shape; and it is in line with EKC hypothesis. Thereby, the role of the entire community elements and government support in implementing mitigation technology and agricultural adaptation is needed to cope with impacts of greenhouse gas emission, such as climate change.


INTRODUCTION
A gr i c u l t u r e i n J a v a r e ma i n s as the dominant sector, viewed from its contributions to total GDP and the employment in this sector.If we view the agricultural sector 's GDP contribution in Indonesia, the agricultural sector contributes to Rp.441.601.433,4 (Billion) or equal to 36.50% out of total GDP of Indonesian agriculture sector.
One of the obstacles in the improvement of community welfare in the agricultural sector, especially in Java, is the environmental externality which constantly exists in every economic activity, and it should be addressed in the economic development by means of improving the agricultural development performance.In reality, the environmental externalities in the agricultural sector are rarely considered, particularly in Indonesia.
As proposed by Irham, (2002), the costs of environmental damage resulted from the production process of goods and services have never been considered.As a result, the price used in the market is way too low in comparison with the applied priceas the price does not include 'environmental costs'.
As a key sector in the fulfillment of food needs, emissions generated from the agricultural sector are expected to continue to keep rising until 2030, alongside increasing food demand.In order to handle this Indonesian Government has committed to reduce GHG emission by 26% by 2020.(Ariani et.al., 2016).Dasgupta et.al. (2002) proposes the hypothesis used in this EKC: at the early stage of the industrialization process, pollution grows real swiftly because the main priority is to increase output, and the community tends to be more interested in getting jobs and having higher income, rather than getting good environmental quality.According to Everett et al. (2010) the reversed-U curve illustrates the degree of environmental degradation will go together with increasing per capita national

Chow Test
The testing mechanism using Chow Test is described as follows (Gujarati, 2006); The research will be conducted using testing with three possible models in panel data analysis, namely OLS, fixed effect, and random effect to get description on the difference of these three results.Further significant effect is found in the cross section unit).
That is, Fixed Effect Model is better than Common Effect Model.

b. Soil Tillage System
Low methane emissions on land without tillage are suspected as the amount of biomass that is returned to the soil is less than the treatment with perfect soil (Wihardjaka, 2015).concentrate feed can decrease the concentration of methane gas from digestion up to 177 ppm or 28.5% when compared with only grass fed grass (Gustiar et.al., 2014).

e. Low Emission Animal Feed
Selection of feed type greatly affects the size of the methane gas produced by livestock.For example cassava leaves can be used as a means of mitigating methane gas emissions because they contain nitrate salts from Ca, K and Na (Herawati, 2012).b.Based on the analysis approach of

Conclusion
The Environment Kuznets Curve, the relationship between greenhouse gas to be able to reduce CH (Wihardjaka, 2015).
gas emissions emission and GRDP per worker has inverted-U shape and in line with the EKC hypothesis.Furthermore, it was found that it produces turning point value when GRDP per agricultural worker is Rp.119,363,000,000.00.At that income level, the greenhouse gas emission begins to be equal to GRDP per worker, where the larger the GRDP value per agricultural worker, the smaller the greenhouse gas emission emitted.

Suggestion
The roles of all community elements and government support are needed to implement mitigation technology and agricultural adaptation to deal with impacts of greenhouse gas emission.Some methods of mitigating greenhouse gas emission reduction mainly from the livestock sector are by increasing the concentrate composition in animal feed, ranch maintenance method, the selection of low-emission feed, the management of cattle waste or manure, the processing of feed ingredients, the supplement.In addition, it is expected that the government will make an effort to improve GRDP per agricultural worker through integration policy between subsectors of animal husbandry, horticulture, food crops in the agricultural sector so that the inter-sub-sector production process can be more efficient and able to increase the GRDP per labor of agriculture sector so that the agricultural actors will have more awareness to allocate some of their income to improve the environment.
and will increase if the environment is in anaerobic condition.The methane emission is strongly affected by types of feed, the quality of poultry feed Agricultural Sector GRDP per Worker The r e l a t i o n s h i p b e t w e e n environmental degradation and average i ncome of agricult ur al wor ker s is conducted to answer whether the actors in the agricultural sector in Java have allocated some of their income to improve the environment as an effort to manage their farming business.This analysis employs The Environmental Kuznets Curve (EKC) model with greenhouse gas emission indicators representing environmental degradation and average agricultural sector workers representing per capita income.As stated by Kuznets, ) will increase in line with increasing per capita income, but if it has reached a certain point called turning-point, there will be decline in environmental degradation despite rising per capita income.Based on the above, the estimation that can be used to view the relationship between environmental degradation and per-capita income is: The Environmental Kuznets Curve (EKC) model with greenhouse gas emission indicators: best model selection was done through Chow Test, Breusch-Pagan, and Hausman.

Figure 2 .
Figure 2. The development of the estimated value of carbon dioxide(CO ) emissions from the use of urea fertilizer in Java Island in 2001-2015

The Measurement of Greenhouse Gas
Dinda (2004)ncome.In the condition above, a certain level of income will have a new turning point.Dinda (2004)andSong,   et.al.(2008)developEKC relationship in the form of cubic polynomials, where such model can be used to examine several relationship forms between environmental indicators and economic growth.

RESULTS AND DISCUSSION The Measurement of Greenhouse Gas Emission (GRK) from Agricultural Sector in Java
2 Figure 1.The development of the estimated value of methane emissions (CH ) from rice field cultivation activity in Java Island in 2001-2015.

Table 1 .
Urea Fertilizer Application in Each Type of Plants Urea Dose with ammonium sulphate or tablet urea fertilizer, applying direct seeding plant (Wihadjaka, 2015), applying intermittent irrigation, and replacing rice varieties with

Table 3 .
Estimates of Methane Emissions (CH ) from Livestock Enteric Fermentation (ton)

Table 6 .
Estimates of Methane Emissions (CH ) from Poultry Manure (ton)

Table 7 .
Chow Test Analysis Result

Table 9 .
Hausman Test Analysis Result

Table 10 .
Estimates of EKC Model of Greenhouse Gas Emission of Agriculture Sector in Java