Do poor farmers have entrepreneurship skill, intention, and competence? Lessons from transmigration program in rural Gorontalo Province, Indonesia

Amelia Murtisari; Irham Irham; Jangkung Handoyo Mulyo; Lestari Rahayu Waluyati

doi:10.1515/opag-2022-0131

Article Open Access

Do poor farmers have entrepreneurship skill, intention, and competence? Lessons from transmigration program in rural Gorontalo Province, Indonesia

Amelia Murtisari , Irham Irham , Jangkung Handoyo Mulyo and Lestari Rahayu Waluyati

Published/Copyright: October 14, 2022

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From the journal Open Agriculture Volume 7 Issue 1

Abstract

Transmigration program is a part of rural development to reduce poverty in which entrepreneurship was also developed. It becomes necessary to explore how the program affects the entrepreneurial aspects of the poor farmers. The objectives of this study are (1) to measure entrepreneurship skill, intention, risk taking, social valuation, and competence of poor farmers, (2) to know the impact of transmigration program in improving the competence of poor farmers, and (3) to analyze the influence of skills, intentions, risk taking, and social valuation toward entrepreneurial competence of poor farmers. One hundred twenty poor transmigrant and 120 local farmer households were interviewed in this study. The data were analyzed by descriptive quantitative method and multiple regression analysis by using SPSS 22. The results showed that transmigration program that provides farmland land freely can improve skill, entrepreneurship intention, risk taking capability, and social valuation of poor farmers. Yet, there is a gap between skills and intentions where entrepreneurship intentions are greater than their skills. The result shows that transmigrant entrepreneurship competence is higher than that of local farmers. However, social valuation of local households is higher than that of transmigrants due to their less adaptability in society. Regression analysis shows that social valuation, skills, intentions, and risk taking have a significant effect on both local and transmigrant entrepreneurship competencies. It can be concluded that transmigration program has successfully changed the mindset of poor farmers to become more entrepreneurial oriented and is one of the important factors in reducing the poverty level particularly in Gorontalo Province, Indonesia.

Keywords: transmigration; poor farmer; entrepreneurship intention; skill; entrepreneurship competence

1 Introduction

Poverty still is one of the serious problems in Indonesia, tincluding Gorontalo Province. The poverty rate of Gorontalo Province is in fifth position among 34 provinces in Indonesia with a total poor population of 186,290 people (15.61 percent) in 2021 [1]. To reduce poverty, the Indonesian government implemented the transmigration program by shifting people from densely populated to sparsely populated regions, including Gorontalo Province as an agricultural and fishery area. Unfortunately, the participants of the transmigration program (called transmigrants) mostly do not have basic skills as fishermen or farmers, resulting in low household incomes, which triggers poverty incidence [2].

Therefore, the government provides entrepreneurship assistance program to improve the living standard of transmigrants [3,4,5,6,7,8]. This is in line with research of Naminse et al. [9,10,11,12,13,14,15], which states that there is a significant relationship between entrepreneurship and poverty reduction in rural areas [16,17]. A number of studies show that poverty reduction can be achieved by increasing entrepreneurial activity such as by Ali and Yousuf [18]. Entrepreneurial activity means overcoming adversity, empowering individuals, as a trigger to be more independent, and enabling the poor to create value, jobs, and benefits. [2,19] However, the fact shows that not all groups of poor households are interested in entrepreneurship as a way to increase their income. Therefore, to know how the poor create the value of jobs and benefits, it is necessary to know the level of entrepreneurial intention of the poor, both transmigrants and local. Based on research [20,21,22,23], it is proved that there is a relationship between the level of entrepreneurial intention and family income.

Entrepreneurial intentions will be followed by a person’s entrepreneurial behavior. Factors of needs, values, desires, habits, and beliefs will affect entrepreneurial intentions, not only that cultural norm must also be considered in determining how is the level of interest transmigrant and local households intend to start entrepreneurship [24]. Other findings reveal that entrepreneurial skills have a positive influence on entrepreneurial competence [25]. Based on [20,26], there are four variables of entrepreneurship competence which should be observed, including entrepreneurship intention, skill, risk taking, and social valuation. Entrepreneurial competence in this study is the ability to use resources to start or improve the performance of small-scale poor farmer households. The role of entrepreneurial competence according to refs. [27,28] plays a role in risk taking, the need for achievement, self-efficacy, and experience in the performance of informal micro-enterprises.

Many studies show that agriculture has a high risk due to its dependence on the climate as well as the nature of agricultural products that are perishable and seasonal. While research [29] explains that there is a positive correlation between risk-taking attitudes and the decision to become an entrepreneur, it is important to know how to reduce risk, find new sources of innovation, use creativity tools, and know market conditions [30]. Another characteristic of farm household entrepreneurship is the role of the family in decision-making and farming activities, in which the research [31] proved that family business owners are more tolerant toward risk. Development programs and policies should focus on increasing the ability of low-income households to take advantage of all available income-generating opportunities and improving the socio-economic status of poor households in Indonesia [29].

In this research, transmigrant and local groups will be compared due to different cultural backgrounds that produced diverse social patterns. This certainly gives rise to a different pattern of entrepreneurship. Based on research [9], there are three factors contributing to entrepreneurial abilities of farmers, namely education, economics, and socio-culture. In fact, the farmers who dare to be entrepreneurs are those who feel trusted by others, feel comfortable, and are able to face all risks. These behaviors grow and develop in people who receive social support [32,33].

Several studies related to entrepreneurship have been conducted, such as measuring entrepreneurial knowledge and skills [1], the number of entrepreneur intention [9,20,31,34,35,36,37], social aspects of entrepreneurship [24,25], business risk-taking ability [27,28], and entrepreneurial competence [29,30,38]. However, identifying entrepreneurship in poor rural households has never been conducted [39]. Previous research only explained about farmer entrepreneurship based on entrepreneur behavior [32], farmer empowerment strategies [40], entrepreneurship training [41], and entrepreneurial performance [42].

This study offers novelty in that the entrepreneurial component of poor farmer households, which includes entrepreneurial intentions, entrepreneurial skills, risk taking, and social valuation, both of local and transmigrant households. This study also provides more specific information, especially related to poor farmer households who have entrepreneurial competence to be economically independent. In addition, this research also provides important information that the transmigration program has a major impact on rural development through entrepreneurial activities that can improve people’s welfare. Another important implication is that the transmigration program is able to change the mindset of poor farmers to improve their entrepreneurial skills, interests, and competencies.

2 Methods

2.1 Sampling technique

The selection of research location was determined purposively with the consideration that the four transmigrant placement units (UPT) or villages are transmigration areas that have been categorized by Ministry of Village, Development of Disadvantaged Region, and Transmigration. This study was conducted in two regions, namely Gorontalo and Boalemo districts where rural areas in these districts are considered to have high poverty levels, such as the Gorontalo Province. Two villages were selected from Gorontalo district (Bukit Aren and Ayumolingo villages) and another two villages (Saritani and Bongo II) from Boalemo district). Respondents were categorized into two groups, namely transmigrant and local poor farmer households. Local farmer households are those who are natives in Gorontalo Province, whereas transmigrants are those who came from outside Gorontalo Province especially from Java island.

Simple random sampling was applied in selecting the respondents, both transmigrants and local farm households. Thirty transmigrant and 30 local farmers were selected from each village. This amount is considered statistically to have met the minimum sample requirements for quantitative analysis [43,44]. The total number of respondents in two districts were 240, consisting of 120 transmigrant and 120 local poor farmer households who received social assistance from the government (Table 1).

Table 1

Number of respondents selected in this study

Research location	Name of UPT/rural village	Total respondents
Research location	Name of UPT/rural village	Local	Transmigrant
Gorontalo District	Bukit Aren	30	30
Gorontalo District	Ayumolingo	30	30
Boalemo District	Saritani	30	30
Boalemo District	Bongo II	30	30
Total respondents by district		120	120
Total respondents Gorontalo Province		240

Source: Primary data.

2.2 Methodology and research variables

Descriptive quantitative methods were used in this study. A survey using questionnaire containing a list of questions was conducted to obtain the data for analysis. The questionnaire was prepared by applying a five-point Likert scale. A value of 1 indicates “strongly disagree” to a score of five means “strongly agree.” The quantitative descriptive test was applied by determining the interval based on the scores from four variables used in measuring entrepreneurship competence.

Four dimensions of entrepreneurship competency measurement are used and explained as follows:

Entrepreneurship intention is defined as an individual’s decision to open a business [18,45,46,47,48,49]. Entrepreneurial intention is a person’s belief in establishing a new business and consciously planning to do so in the future [50], influenced by cultural factors and social conditions [50] as external variables. Every entrepreneurial intention needs to be followed by entrepreneurial action; therefore, entrepreneurial skills are needed to make it happen because it positively influences and lifts the entrepreneurial spirit [51].
Entrepreneurship skills are a collection of knowledge, attitudes, and skills possessed by a person for business success [1,29,30,52]. The use of this variable in this study is in line with [53] which states that entrepreneurial skills have a strong relationship with entrepreneurial intentions. The findings reveal that entrepreneurial skills have a positive effect on entrepreneurial competence [54]. In fact, entrepreneurial competence is related to one’s knowledge, skills, and capabilities as an intangible but valuable resource because it contributes to the competitive advantage of a business [55].
Risk taking is defined as a risk-taking behavior in the context of the decision to become an entrepreneur, as well as the risks that will arise in entrepreneurship [6,28,39,56,57]. This variable is included in this study based on previous research [29] that there is a positive correlation between risk attitude and the decision to become an entrepreneur. Another study ref. [58] explains that risk propensity is the main predictor of entrepreneurial intention.
Social valuation is defined as an individual assessment of entrepreneurship in the community supported by family or society [24,59,60,61,62]. The social valuation variable is included as one of the variables in the study because transmigrant households come from different regional and ethnic backgrounds. Therefore, there are various social conditions. Social valuation comes from the immediate family environment, colleagues, or social life of the community. The research by Malebana et al. [63] revealed that social valuation has a positive and statistically significant relationship with entrepreneurial intentions, attitudes to become entrepreneurs, perceived behavioral control, and subjective norms. In addition, the social life of transmigration can also be an important social capital for entrepreneurial activities. Research [20] shows that there is a positive influence of social capital on entrepreneurial competence.

2.3 Statistical analysis

Factors that affect the entrepreneurial competence of transmigrant and local farmer households were analyzed by using multiple regression analysis. Validity and reliability analysis were carried out prior to regression analysis by using SPSS version 22 with the following equation:

Y i = β 0 + β 1 X 1 + ⋯ + β n X n + U i .

3 Results

3.1 Research site conditions

The development of the transmigration pattern in Gorontalo Province consists of the dry land pattern and the fishing pattern. This research focuses on dry land transmigration pattern. In the dry land pattern, the agricultural sector is used as a foothold as well as the main source of income for transmigrant households. Each transmigrant gets three lands, including the yard as a place to live, first farm land, and second farm land, which is used for farming activities as well as a source of income for transmigrant households. As a complement to the transmigration program, the Indonesian government has also launched various entrepreneurship and social programs, including the Program Keluarga Harapan (Hope Family Program), Bantuan Pangan Non Tunai (Non-Cash Food Aid), Bantuan Langsung Tunai (Cash Direct Assistance), Kelompok Usaha Bersama (Joint Business Group), and Usaha Ekonomi Produktif (Productive Economic Business).

Two study sites (Boalemo and Gorontalo districts) have different characteristics. First, the Boalemo district (Figure 1) is bordered by North Gorontalo district in the north, Tomini Bay in the south, Pohuwato district in the west, and Gorontalo district in the east (Central Statistics Government Gorontalo Province regarding geographical conditions). The population of Boalemo district is 147,038 with a growth rate of 1.18% in 2010-2020². As many as 46.66% of the productive population work in the agricultural sector. The main commodities are corn and rice. Farmer households also cultivate other commodities, such as vegetable crops (77.97% is chili and 13.25% is tomato).

Figure 1

Location of five villages as research site in Boalemo and Gorontalo district map of Gorontalo province, Indonesia.

Gorontalo district is bordered by North Gorontalo district in the north, Tomini Bay is in the south. In the west it is bordered by Boalemo district, while in the east, it is bordered by the district of Bone Bolango and the city of Gorontalo. The area of Gorontalo district is 15.55% of the area of Gorontalo Province with a population of 393,107 people and a population growth rate of 0.96%. Gorontalo Regency has potential in agricultural sector. Corn is one of the leading commodities for farmers in Gorontalo Regency. Potential horticulture commodities are shallots, chilies, cayenne pepper, tomatoes, Chinese cabbage, kangkong, and cucumbers. Commodities produced in the plantation are coconut and sugar cane [64].

3.2 Characteristics of respondents

Characteristics of the respondent based on age, gender, household size, and education can be seen in Table 2.

Table 2

Characteristics of respondents research (N = 240) (%)

		Rural communities
Item		Transmigrant	Lokal
Age	<27	2.50	20.83
	27–37	17.50	30.00
	38–48	33.33	25.83
	49–59	34.17	15.00
	60–70	10.83	7.50
	>70	1.67	0.83
Gender	Male	69.17	60.00
Gender	Female	30.83	40.00
Household size	1	3.33	0.83
	2	20.83	20.83
	3	23.33	30.83
	4	33.33	35.83
	≥5	19.17	11.67
Education	No school	1.67	2.50
	Primary school	52.50	89.17
	Junior high school	16.67	5.00
	Senior high school	28.33	3.33
	College	0.83	0.00

Source: Primary data for 2021, the lowest level of education is elementary school (SD), whereas the highest level of education is college (PT). Household size is the number of family members living in one house. Productive age range is 15–64 years.

In terms of age, Table 2 shows that the two farm households (transmigrant and local ones) are dominated by productive age (27–59 years), although the local farmer households is younger than that of the transmigrant farmer households. This should be an evaluation for the government in implementing the transmigration program in the future to prioritize productive age participants because the number of productive age has a significant effect on regional economic growth [65,66]. The productive age is also easy to accept the transfer of information and technology as one of the important demographic factors in developing entrepreneurship.

The transmigrant and local farmer households are dominated by male, as much as 69.17% in transmigrant households and 60.00% in local households. Several studies have stated that there is no significant difference in the achievement of entrepreneurial competence and entrepreneurial intentions between male and female [67,68] as well as transmigrant and local farm households in Gorontalo Province.

The agricultural sector cannot be separated from the role of family members who are not only workers but also decision makers. Research [69] reveals that marginal farmers with small land and lack of resources will use more family labor to reduce farming costs, including Gorontalo farmers who involve family members in farming activities rather than hired labors. Based on Table 2, transmigrant and local households have an average family size of four people, although local households have more family members than that of transmigrants. This is because transmigrant households who came to Gorontalo did not bring all their family members with them.

In terms of the level of education of farmers, Table 2 explains that the transmigrant and local farming households are dominated by elementary school education (SD). From the aspect of education, the transmigrant households are relatively better than that of locals: 16.67% of transmigrants have junior high school education and 28.33% high school education, implying that the transmigrant households have a better human capital to start entrepreneurial activity.

3.3 Reliability analysis of entrepreneurship variables

Reliability analysis is carried out to measure construct variables of research instruments [70]. One of the reliability measurements is Cronbach Alpha. Based on the recommendations from various researchers, the Cronbach Alpha value should be 0.60 [71]. This study has four variables: entrepreneurial skills, entrepreneurial intentions, risk taking, and social valuation. Table 3 explains that based on the reliability test of transmigrant and local households, they have a Cronbach alpha value of >0.60, which means that the instruments used in this research were reliable and reveal actual information. Consequently, the research variables are reliable too.

Table 3

The value of reliability by Cronbach Alpha

Dimensions	Transmigrant farmers	Local farmers
Entrepreneurial skill	0.918	0.920
Entrepreneurial intention	0.938	0.946
Risk taking	0.859	0.831
Social valuation	0.808	0.796

Source: Data processed, 2021.

3.4 The level of entrepreneurship skills, intentions, risk taking, social valuation, and competence of poor farmers

Entrepreneur skill is believed to be one of the factors that influence a person’s intention to start a business. The indicators of entrepreneurship skills in this study are readiness to start an agricultural business, ability to practice new business, ability to control business, and ability in business development as well as participation in training in agriculture. Number of family members who have skills in related sectors is also an indicator in this study. Table 4 shows that more than 50% of poor farmers in the study area are ready to start agricultural business (61.67%) and non-agricultural business (57.92%), including controlling the business and further development of the business (57.5%). Yet, they still need more skills in practicing such a new business (49.17%). Table 4 also shows that the participation in agricultural training and number of family members with skills in related sectors of both local and transmigrant households are the lowest (26.25 and 9.58%, respectively) compared with that of other indicators.

Table 4

Level of entrepreneurship skills of poor farmers (%)

Indicators of entrepreneurship skills	Percentage
Readiness to start an agricultural business	61.67
Readiness to start a business in other sectors	57.92
Ability to control business	57.50
Ability to practice new business	49.17
Ability in business development	57.50
Participation in training in agriculture	26.25
Family members with skills in related/off-farm sectors	9.58
Average	45.65

Source: Primary data processed, 2021.

Theoretically the more often they participate in training, more skill will be gained, and hence, they will have higher intention to become an entrepreneur. Likewise, the higher the number of family members who have skills, the greater the chance of them to be an entrepreneur [43,44,72]. However, the study shows that the number of family members with skills in related or off-farm sector and participation in training in agriculture is still low. It implies that collaboration between government and private sector is needed to launch various training and mentoring programs to improve skills of both transmigrant and local household farmers to increase the ability to start and practice a new business, especially in agriculture. The program should be adapted with the potential of local products, such as processing corn, oranges, and chilies or financial management for entrepreneurship of households and small businesses.

Table 5 shows that transmigrant and local poor farmers have a high intention for entrepreneurship with an average of 62.78%. Such a relatively high intention is triggered by the insufficient production of farming which is unable to fulfill household needs and there is no choice to work in the private sector such as factories, besides that they do not have work opportunity in the formal sector due to low education.

Table 5

Level of entrepreneurship intentions of poor farmers (%)

Indicator of agriculture entrepreneurship intention	Percentage
Interested in entrepreneurship in agriculture and related sectors	61.25
Readiness to open a business in agriculture and related sectors	62.50
Have a goal of opening a business	62.50
Maximum determination to start and run a business	61.67
Determined to create a legal entity in the future	63.75
Intend to start a business someday	65.00
Average	62.78

Source: Primary data processed, 2021.

However, the study found that the high intention to become an entrepreneur is not followed by high skills (Table 6). This condition creates a gap between intention and disproportionate skill where it indicates that the limited skills become an obstacle to become entrepreneurs. It means that more efforts are needed to achieve the minimum skill standards of both local and transmigrant households. The results of this analysis can be used as a basis for policy formulation of the government in developing human resources based on minimum skill standards that must be provided by local and transmigrant households.

Table 6

Gap between entrepreneurship skills and intentions of poor farmers (%)

Indicators	Percentage
Average entrepreneurship skills	45.415
Average entrepreneurship intention	62.78
The difference	(17.365)

Source: Primary data processed, 2021.

Based on Table 7, it shows that the average of entrepreneurship competencies of both transmigrant and local household was 327. The score of social valuation is higher than all other variables, but the score of entrepreneurship skills is lower than all others. Skills are still one of the factors that need to be improved to increase entrepreneurial competence.

Table 7

Level of entrepreneurship competencies of poor farmers

Entrepreneurship competence	Percentage
Entrepreneurship skills	237.93
Entrepreneurship intention	339.75
Risk taking	353.62
Social valuation	376.83
Average	327.02

Source: Primary data processed, 2021.

In addition to entrepreneurship skills and intentions, the component of entrepreneurship competence is also determined by another two indicators, namely risk-taking ability and social valuation [6,73,74]. Table 8 explains that 72.08% poor farmer households always ask a direction in entrepreneurship development as they have relatively low self-confidence to start a business. On the other hand, around 60% of poor farmer households are willing to accept the uncertainty and to take risks, indicating a good prospect in entrepreneurship development in the study area.

Table 8

Level of risk taking of poor farmers (%)

Risk-taking indicators	Percentage
Always ask and direction in entrepreneurship	72.08
Always think first about entrepreneurship	67.50
Willing to take risks in entrepreneurship	60.83
Can accept uncertainty in entrepreneurship	60.42
Average	65.21

Source: Primary data processed, 2021.

Social capital is also an essential factor in developing entrepreneurship. Table 9 shows how family members are considered as social capital for the farmers [75]. The average social valuation score of 69.17% indicated that support from family, friends, and coulleagues is very needed by the transmigrant and local farmer households in forming entrepreneurship competence.

Table 9

Level of social valuation of poor farmers (%)

Social valuation indicator	Percentage
Support from close family	85.00
Support from close friends	62.92
Support from colleagues	59.58
Average	69.17

Source: Primary data processed, 2021.

3.5 The impact of transmigration program in improving the entrepreneurial competence of poor farmers

The component of entrepreneurship competence in this study was built by four indicators, including skills, intentions, social valuation, and risk-taking ability. To see the impact of the transmigration program on the entrepreneurship competence, the difference in score of each component between transmigrant and local is used (Table 10). Positive sign indicates the success of the transmigration program in improving the entrepreneurship of the poor farmers in the study area.

Table 10

Entrepreneurship competencies of poor farmers

Entrepreneurship competence components	Transmigrant	Local	Difference
Entrepreneurship skills	257.57	218.29	+36.28
Entrepreneurship intention	369.00	310.50	+58.50
Risk taking	378.00	329.25	+48.75
Social valuation	366.67	387.00	−20.33
Average	342.81	311.26	+31.55

Source: Primary data processed, 2021.

It can be seen from Table 10 that the entrepreneurship competence of transmigrants is higher than that of local farmers (positive signs). Judging from the components that make up entrepreneurship competencies, transmigrants are higher in three components, namely entrepreneurship skills, entrepreneurship intentions, and risk taking. However, in terms of the social valuation component, local farmers contribute a higher value than transmigrants. This result is most probably caused by the difference in social environment of transmigrants who come from different cultural and regional backgrounds, for example, from the Javanese, Balinese, and Sundanese. Different backgrounds make transmigrants need more time to adapt to the new social environment.

To see the impact of the transmigration program on each component of the entrepreneurship competence, the difference in percentage of each indicator between transmigrant and local is used. Positive sign indicates the success of the transmigration program in improving the entrepreneurship competence of the poor farmers. In terms of entrepreneurship skill, from all indicators, especially readiness to start a business in other sector, it can be seen that the average of transmigrant household has a higher entrepreneurship skill (positive signs) than that of local farmers (Table 11). It may be due to the fact that the transmigrants received skills training in their place of origin such as farm management and food processing prior to the departure to the destination region (Gorontalo Province).

Table 11

Level of entrepreneurship skills of poor farmers (%)

Indicators of entrepreneurship skills	Transmigrant	Local	Difference
Readiness to start an agricultural business	64.17	59.17	+5.00
Readiness to start a business in other sectors	63.33	52.50	+10.83
Ability to control business	60.83	54.17	+6.66
Ability to practice new business	53.33	45.00	+8.33
Ability in business development	60.00	55.00	+5.00
Participation in training in agriculture	26.67	22.50	+4.17
Family members with skills in related sectors	11.67	7.50	+4.17
Average	48.57	42.26	+6.31

Source: Primary data processed, 2021.

It is interesting to see that the entrepreneurship skills of transmigrants is higher than that of local farmers followed by their higher entrepreneurship intention (Table 12). It may be triggered and motivated by their spirit to change their destiny for the better life through the transmigration program by moving from their origin to Gorontalo Province.

Table 12

Level of entrepreneurship intentions of poor farmers household (%)

Indicators of agriculture entrepreneurship intention	Transmigrant	Local	Difference
Interested in entrepreneurship in agriculture and related sectors	68.33	54.17	+14.16
Readiness to open a business in agriculture and related sectors	70.83	54.17	+16.66
Have a goal of opening a business	65.00	60.00	+5
Maximum determination to start and run a business	67.50	55.83	+11.67
Determined to create a legal entity in the future	65.00	62.50	+ 2.5
Intend to start a business someday	70.83	59.17	+11.66
Average	67.92	57.64	+10.27

Source: Primary data processed, 2021.

Table 12 indicates that transmigrant contributes a higher score in all indicators than that of local farmer households in terms of agriculture entrepreneurship intention. From the intention of agriculture entrepreneurship, there is evidence that the average poor farmer households, both local and transmigrant, have a relatively high entrepreneurship intention (>50%) even though high entrepreneurship intentions were not supported by their skills, whereas entrepreneurial skills determine a person’s success in running a business [76]. Table 12 shows that the signs of all difference are positive, indicating that the transmigration program is able to increase the entrepreneurial intentions of transmigrant farmers. This condition is triggered by the desire to change their life for the better.

As can be seen from Table 13, transmigrants contribute the higher average of risk taking than that of local households. However, both have similarities in terms of always asking for direction in entrepreneurship (the highest score of both). This condition is supported by the fact that there is a dependence of transmigrant households on field assistants from the relevant agencies in terms of assistance [77]. For the transmigrants, government provided a home gardens, farmland 1, and farmland 2 located nearby their house in transmigration area. However, those facilities were not ready to be cultivated as the main source of income for transmigrant households; hence, they are accustomed to risk taking. Positive differences for all indicators also show that transmigrant farmers have risk-taking readiness, due to the fact that the transmigration area which struggles with poor road access, far from the city center, no internet access, far from markets, and gardening areas compared with their place of origin. These conditions are different from local farmers who are already familiar with the location and social condition of the community, so they have a lower level of risk taking. Courage to take risks is needed to compete business uncertainty in agriculture and related sectors.

Table 13

Level of risk taking of poor farmers (%)

Risk-taking indicators	Transmigrant	Local	Difference
Always ask direction in entrepreneurship	77.50	66.67	+10.83
Always think first, about entrepreneurship	73.33	61.67	+11.66
Willing to take risks in entrepreneurship	62.50	59.17	+3.33
Can accept uncertainty in entrepreneurship	64.17	56.67	+7.5
Average	69.50	61.04	+8.46

Source: Primary data processed, 2021.

The level of social valuation was analyzed to determine surrounding environment in the form of support from family, friends, and colleagues to become entrepreneurs. Based on Table 14, the highest support is obtained from their close family for both local and transmigrant households. This condition may be due to the role of family members in farmer households which has a strong influence on entrepreneurial intentions due to the daily interactions [51,78]. It means that family members are sometimes used as social capital for the family [75].

Table 14

Social valuation level of poor farmers (%)

Social valuation indicator	Transmigrant	Local	Difference
Support from close family	84.17	85.83	–1.66
Support from close friends	57.50	68.33	–10.83
Support from colleagues	59.17	58.33	+0.84
Average	66.94	70.83	–3.89

Source: Primary data processed, 2021.

The difference in sign, which is dominated by a negative sign, indicates that based on the social valuation aspect, transmigrant households still need more social support to become entrepreneurs, considering that transmigrants who came from outside the Gorontalo region meet a new social environment with different ethnic backgrounds.

3.6 Factors that influence the entrepreneurship competence of poor farmers

Eight variables were analyzed to determine the level of competence of transmigrants and local poor farmers. The eight variables include age (×1), farming experience (×2), education (×3), number of dependents in the family (×4), social valuation (×5), entrepreneurial skills (×6), entrepreneurial intention (×7), risk taking (×8), and dummy variables between local farmers and transmigrants with the following research hypotheses:

H ₀: There is no effect of variable x on variable y

H ₁: There is an influence of the variable x on the variable y

The adjusted R² value is 0.886, which means that 88.6% of the entrepreneurship competency variables can be explained by all the independent variables (age, farming experience, education, number of family dependents, social valuation, entrepreneurial skills, entrepreneur intention, and risk taking), and the 11.4% are caused by other variables outside the model.

Table 15 explains that the calculation of F value is 207,580 with a probability of 0.001 below 0.05; it can be concluded that the variables of age, farming experience, education, number of family dependents, social valuation, entrepreneurial skills, entrepreneurial intention, and risk taking have an overall significant effect on local entrepreneurship competencies. For transmigrants, H ₁ is accepted and H ₀ is rejected.

Table 15

Factors affecting entrepreneurship competence for poor farmers

Entrepreneurship competency variables	B	t	Sig
Constant	–1.645***	–12.221	0.001
Age (×1)	0.002	1.017	0.310
Farming experience (×2)	–0.001	–0.526	0.600
Education (×3)	–0.015	–0.509	0.611
Number of family (×4)	0.011	0.633	0.527
Entrepreneurial skill (×6)	0.067***	9.977	0.001
Entrepreneurial intention (×7)	0.062***	8.665	0.001
Risk taking (×8)	0.062***	5.535	0.001
Social valuation (×5)	0.079***	7.612	0.001
Dummy local and non lokal	–0.102**	–2.325	0.021
Adjusted R²		0.886
F		207.580

Source: Primary data processed, 2021.

The results of the analysis indicate that age, farming experience, education, and number of family dependents have no effect on entrepreneurship competence. The significance value of age is >0.05, which indicated that there is no effect of age on entrepreneurship competence. This is in line with previous research [50], which explains that age does not affect an individual’s desire to enter into entrepreneurship.

Several studies explained that work experience has a positive relationship with entrepreneurial intention [50,79], but in this study, it provides different results. The results shown in Table 15 reveal that the impact of experience or a longer working history as a farmer tends to be less interested in opening a new business. The results of this study in line with [59] prove that individuals who spend longer time in their careers in work tend to be less entrepreneurial.

Indeed, education contributes to the competence, but research on local and transmigrant households shows different results. The significant value of >0.05 explains that education has no effect on entrepreneurship competence so that differences in education levels do not provide differences in entrepreneurship competency levels. This is due to the tendency of farmers who are identical with low education. More than 70% of local and transmigrants have only an elementary school education. On the contrary, there is a tendency for those with higher education to be reluctant to enter the agricultural sector. This study is in line with the research from ref. [80], which showed that the level of education did not have a significant impact on a person’s intention to start entrepreneurship.

Family members may be used as capital for their business [75,81], but different results are shown in this study. Based on the results, it seems that the number of family dependents has no effect on entrepreneurship competence with a significance value >0.05. Farmer households with more than two dependent families tend to have a low tendency to become entrepreneurs. This is because more time is used to take care of their family than for economic activities.

The statistical t-test results in Table 15 show that the social valuation variable has an effect on the entrepreneurship competence variable with a significant value <0.05. Support from the surrounding environment, such as family, friends, and colleagues, as a social capital affects the entrepreneurship competence of local and transmigrants. This study in line with [26] explains that social capital has a positive effect on entrepreneurial competence [24]. It also reveals that the social valuation of entrepreneurship has a positive and significant relationship to entrepreneurial intention, while entrepreneurial intention has a positive effect on entrepreneurial competence [53].

Entrepreneurship skills also affect entrepreneurial competence as the value of significance is <0.05. The evidence of this analysis is supported by the research from refs. [29,54,82], which explained that entrepreneur skills have a positive effect on entrepreneurial competence and are important for entrepreneurial development. The facts in the field showed that the entrepreneurship skills of local and transmigrants are not as big as their entrepreneurship intentions, even though skills have a strong relationship with entrepreneurial intentions; however, skills training activities need to be improved as an important capital in entrepreneurship [55,83,84].

Entrepreneurship intention also affects entrepreneurship competence with a significance value of <0.05. The higher intention of local and transmigrant entrepreneurship illustrates the enthusiasm to change the livelihoods of the poor group into a more prosperous group of transmigrants. Having a high entrepreneurship intention is a good initial capital for an entrepreneur because entrepreneurial intention is strongly related to entrepreneurial competence. It is supported by previous research that provides evidence of a two-way relationship between entrepreneurial intentions and various entrepreneurial competencies [53,85].

Not only social valuation variables, entrepreneurship skills, and intentions, but risk-taking variables also affect entrepreneurship competence with a significance value of <0.05. Risk-taking attitudes not only have an impact on the decision to become an entrepreneur [29], but also determine business viability and failure [27,86,87,88]. The beta value of 0.062 indicates that every one unit increase in risk-taking ability will increase entrepreneurship competence by 0.062.

The dummy variable of local and transmigrants shows a significant value which is 0.021 (<0.05) and has a significant and negative sign implying that the competence of local farmers are 0.102% lower than that of transmigrants. This result indicates that transmigration program has been successfully improving the entrepreneurship competence of poor farmers.

4 Discussions

The research findings showed that transmigrant entrepreneurship intentions are higher than that of local farmers and their entrepreneurship skill is also higher than local farmers. These study also found that the skills of poor farmers (local and transmigrants) are smaller than their intentions; therefore, there is a gap between them where 15.38 for local households and 19.35 for transmigrant households. A gap between skills and intention implies the need for training and mentoring programs for transmigrants in a sustainable manner to increase their entrepreneurship competence to become entrepreneurs.

Moreover, other than indicators of skills and intentions, there are other components that are also used to measure entrepreneurship competencies, namely social valuation and risk taking. From four indicators, it is explained that transmigrants have a higher entrepreneurship competency component for skills, intentions, and risk-taking indicators, but for social valuation indicators, locals have higher competence. Even though, they are both in the same location, it has a different impact on entrepreneurship competence, besides that higher entrepreneurship competence does not guarantee that all the constituent indicators have a high value, but in fact there is one indicator that has a lower value, namely social valuation.

Finally, this study reveals that the transmigration program can be used to develop the rural areas by changing the mindset of poor farmer households through entrepreneurial activities. There are differences in the entrepreneurship competencies of local and transmigrant households. Increased entrepreneurial intention, entrepreneurial skills, and competencies are expected to improve the welfare of transmigrant farmer households. It is interesting that indicators of social valuation, entrepreneurship skills, entrepreneurship intentions, and risk taking affect the entrepreneurship competencies of local and transmigrant households. However, further research should be carried out especially measuring entrepreneurship competencies based on different educational groups, ages, and ethnic backgrounds. Furthermore, it suggests that for measuring entrepreneurship competency, several more indicators can be added such as entrepreneurship motivation, leadership, and culture.

5 Conclusions

Based on the entire analysis, a number of conclusions are made as follows:

Poor farmers have entrepreneurial competencies based on the value of entrepreneurial intentions, entrepreneurial skills, risk-taking abilities, and social valuation. However, it is found from the study that there is a gap between entrepreneurial skills and intention, in which a relatively high entrepreneurial intention of poor farmers is not supported by entrepreneurial skills even though these two variables are important in increasing entrepreneurial competence. The study suggests that risk-taking ability and social valuation should not be ignored as they play an important role in increasing the entrepreneurial competence of poor farmers.
The transmigration program as a part of rural development is able to improve entrepreneurial skills, entrepreneurial intention, and entrepreneurial competencies of poor farmers in the study area, implying that this program is a successful one.
The regression analysis result shows that entrepreneurial skills, intention, risk-taking ability, and social valuation have significant impacts in increasing entrepreneurial competence for both transmigrants and local poor farmers. The result also indicates that transmigrant farmers have a higher level of competence than that of local farmers. This result does not always imply that transmigrant farmers are superior to local farmers due to the fact that from the aspect of social valuation, the support of family and colleagues is greater for local farmers than that of transmigrants. It suggests that the entrepreneurial competence improvement must be carried out toward both groups of poor farmers to provide business opportunities, thereby increasing their welfare. The results of this study recommend that the transmigration program must be widely implemented.

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Acknowledgments

The authors convey a sincere thanks and appreciation to the Ministry of Education, Research and Technology (Kementerian Pendidikan, Riset dan Teknologi) for the financial support as well as to Dinas Tenaga Kerja and Transmigrasi of Boalemo and Gorontalo district for assisting field work.

Funding information: This work has been financed with sources of the Ministry of Education, Research and Technology (Kementerian Pendidikan, Riset dan Teknologi).
Author contributions: All authors listed were contributed significantly to the work and have agreed to the published version of manuscript. I.I.I. proposes research ideas, coordinates the research team and corrects the results of the analysis. A.M. performs data analysis and manuscript writing. J.H.M. checks the validity of the data and the results of data analysis. L.R. checks the validity of the data analysis results.
Conflict of interest: The authors state no conflict of interest.
Data availability statement: The datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.

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Received: 2022-03-07

Revised: 2022-06-20

Accepted: 2022-08-11

Published Online: 2022-10-14

This work is licensed under the Creative Commons Attribution 4.0 International License.

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https://doi.org/10.1515/opag-2022-0131

Keywords for this article

transmigration; poor farmer; entrepreneurship intention; skill; entrepreneurship competence

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