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The increased role of the sub-optimal land to support food security continue to be encouraged in Indonesia, given the more limited expansion for potential land. But until recently, development of sub-optimal land becomes not an easy thing. Ecological and technical barriers became the main issue. A series of these issues resulted in a high number of underemproleymeny and poverty in agriculture region. Technological inovation of agriculture and the business diversification can be seen be the solution to those issues. This research aims to analyze the impact of the technological innovation and business diversification on underemployment, working time, household income and also sustainable livelihoods of farmers on the sub-optimal land. The research was carried out in Pemulutan District, Ogan Ilir Regency, South Sumatra Province, Indonesia. The objects of research are farmers which adopter and non adopter technological innovation, and also work outside of paddy farming (business diversification). The research method is the survey. Method of sampling is stratified random sampling. Data obtained in the field analyses using descriptive statistics and inferesia. The results showed there are positive impact of technological innovation on the allocation of working time farmer households, the numbers underemployment, household income and livelihood sustainability. Determinant factors for farmers in applying technology and business diversification are paddy farming income, offfarm income, and age. The use of technology and business diversification proves to be one of the positive scenarios for sustainable livelihood of farmers in sub-optimal land.

TECHNOLOGICAL INNOVATION AND BUSINESS DIVERSIFICATION: SUSTAINABILITY LIVELIHOODS IMPROVEMENT SCENARIO OF RICE FARMER HOUSEHOLD IN SUB-OPTIMAL LAND