Research on World Agricultural Economy

Agricultural Green Innovation and Food Security in Indonesia: Exploring Green Economy Transformation

Bunga Aditi

Faculty of Economics and Business, Universitas Harapan, Medan, North Sumatera, Indonesia

Suginam Suginam

Department of Management, Universitas Harapan, Medan, North Sumatera, Indonesia.

Cia Cai Cen

Department of Management, Sekolah Tinggi Ilmu Ekonomi Bina Karya, Tebing Tinggi, North Sumatera, Indonesia.

DOI: https://doi.org/10.36956/rwae.v6i4.2412

Received: 2 July 2025; Published: 23 September 2025

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Abstract

Sustainable development in developing countries requires integrated approaches addressing environmental sustainability, economic growth, and food security simultaneously. This study advances agricultural innovation research by employing structural equation modeling to examine the mediating role of green economy transformation in the relationship between individual farmer innovations and sustainable food security outcomes, providing novel empirical evidence on systemic mechanisms that translate micro-level innovations into macro–level food security benefits in developing country contexts. A cross–sectional survey of 398 Indonesian smallholder farmers employed Partial Least Squares Structural Equation Modeling to test complex mediation relationships within an integrated theoretical framework. Green entrepreneurial innovation was measured through product, process, organizational, and marketing dimensions, while green economy transformation encompassed resource efficiency, technology access, policy support, and environmental contribution. Results explained 61.2% of food security variance with all relationships statistically significant (p < 0.001). Green entrepreneurial innovation influenced food security directly (β = 0.394) and through green economy transformation (β = 0.668 → 0.421). Mediation analysis revealed partial mediation, with green economy transformation accounting for 41.6% of the total effect (β = 0.281). Findings demonstrate that sustainable food security requires integrated approaches targeting both individual farmer capacity and broader green economy development. Policy interventions addressing innovations alone achieve suboptimal results without complementary systemic changes in markets, institutions, and infrastructure, providing valuable guidance for evidence–based sustainable agricultural development policy across developing countries.

Keywords: Green Entrepreneurship; Sustainable Food Security; Green Economy Transformation; Smallholder Farm‑ ers; Agricultural Innovation; Indonesia

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