Sector
Agriculture
Indonesia, with its archipelago of volcanic soil and plentiful rainfall, offers a natural abundance that sustains the nation and plays a crucial role in its economic prosperity. One of the country’s leading sectors is agriculture, supporting the livelihoods of millions and making a significant contribution to Indonesia’s Gross Domestic Product (GDP). From rice paddies to coffee plantations, this diverse range of crops reflects the country’s unique geography and climate, making it a powerhouse in the global agricultural market.
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Agriculture
Indonesia, with its archipelago of volcanic soil and plentiful rainfall, offers a natural abundance that sustains the nation and plays a crucial role in its economic prosperity. One of the country’s leading sectors is agriculture, supporting the livelihoods of millions and making a significant contribution to Indonesia’s Gross Domestic Product (GDP). From rice paddies to coffee plantations, this diverse range of crops reflects the country’s unique geography and climate, making it a powerhouse in the global agricultural market.
In 2022, Indonesia’s agricultural sector generated approximately Rp2.4 quadrillion in GDP. This sector alone accounts for 12.4 percent of the country’s GDP, underlining its importance to the national economy. The following year, the country experienced a steady growth rate of 1.3 percent in this sector.
Agriculture serves as a key sector for the national economy in various Indonesian provinces, including Aceh, North Sumatra, West Sumatra, Riau, Jambi, Bengkulu, and South Sumatra. Additionally, the provinces of Lampung, Bangka Belitung, West Java, Central Java, East Java, and West Kalimantan, among others, also consider agriculture as a key sector.
This sector offers a rich variety of commodities, including paddy, corn, soybean, sweet potato, and cassava – all staple commodities that play a vital role in sustaining Indonesia’s food supply. Additionally, crops such as cocoa, coconut, coffee, and palm oil are essential for export income and providing job opportunities. In terms of employment, the agriculture sector employs nearly 28 percent of the country’s workforce.
The country’s agricultural sector has also attracted significant foreign investment in 2023, with roughly US$2 billion in direct contributions. With this sector helping sustain Indonesia’s food supply, the country’s paddy production statistics that same year indicate that roughly 10.2 million hectares of land were harvested, yielding an estimated 56.63 million tons of dried unhusked rice (GKG). Once processed for consumption, this translates to approximately 30.9 million tons of rice available for the population.
In a move to strengthen its agricultural foothold within Southeast Asia, Indonesia seeks to expand cooperation with Vietnam in both agriculture and aquaculture. Indonesia and Vietnam are forging a partnership to modernize their agriculture and aquaculture industries. This collaboration will leverage digitalization for improved efficiency and invest in research and development to enhance the quality and global competitiveness of their agricultural and fishery products.
Latest News
President Prabowo Subianto sprang another foreign policy surprise, or a blunder depending on how one looks at it, by joining the Board of Peace which United States President Donald Trump launched last week as part of his Gaza peace plan.
The President is one of only a handful of head of states or their representatives who signed up to the board at its launch on the sidelines of the World Economic Forum in Davos. Other countries represented were Hungary, Turkey, Saudi Arabia, Qatar, Argentina, Pakistan, Kazakhstan and the United Arab Emirates
Typical of Trump, the event stole the show in the prestigious and high-powered annual business gathering in the Swiss hill resort. Prabowo’s maiden speech in Davos, in which he gave a rosy picture of Indonesia before global investors, got drowned out by the noise that came with the launch of the controversial board.
If this is considered a blunder that many foreign policy scholars have claimed, then it is the biggest one that Prabowo has committed, because of the unknown but likely dire consequences at home and abroad.
Critics say the board undermines international law and overrides the work of the United Nations; it lacks Palestinian involvement; and it confers too much power on its chair, who is none other than Trump, even going beyond his presidency, which ends in 2028.
The worst part of the deal is that it makes no mention of an independent Palestine state as one of the board’s objectives. This is hugely problematic for Indonesia, which has long and persistently campaigned for the creation of a sovereign nation for the Palestinian people.
It is so controversial that many other foreign leaders, including those from traditional US allies in Europe, declined to join the board.
To those who have followed Prabowo’s foreign policy acts, joining the board was actually almost a matter of course. He has wiggled his way to a carve a role for Indonesia in the Israel-Palestine conflict. He was among the eight leaders from Arab and Muslim-majority countries that Trump invited to New York in September to get a sneak preview of his Gaza peace plan. He attended the launch of the plan in Egypt in October. Now joining the Board of Peace fits the trend.
Prabowo has also offered to send up to 20,000 Indonesian soldiers to join the International Stabilization Force that Trump envisages to enforce his Gaza peace plan. Indonesia is the only country that has made that commitment. Earlier Prabowo also offered to take on up to 2,000 Gazans who are injured and traumatized by the war for treatment in Indonesia.
But it was Prabowo’s audacity in joining the board that raised questions about his willingness to go this far in dealing with the Israel-Palestine conflict. This puts him at odds with Indonesia’s long-held policy of consistently supporting the Palestinian people and ruling out opening ties with Israel until they get their homeland, not before.
What other surprises will he spring next?
Forming ties with Israel may not be all that far-fetched now with Israeli Prime Minister Benjamin Netanyahu also joining the board. Sitting on the same board opens a line of communication that has never existed before in the absence of diplomatic ties. Indonesia could be lined up to sign on to the Abraham Accords, a US initiative to bring Israel and Arab and Muslim-majority countries together.
Prabowo has come up with several foreign policy surprises, including one or two blunders, since he took office in October 2024, but none as serious as this one.
In November 2024 during a visit to Beijing, he signed on to a joint statement with his Chinese counterpart Xi Jinping to work on joint development cooperation in what the statement described as a disputed territory in the South China Sea. Indonesia officially rejected the word “disputed” since China’s claim is based on it being a traditional fishing ground, which, under international law cannot be used as the basis for a claim. The Foreign Ministry somehow was able to pull Indonesia out of that commitment.
Prabowo agreed to send home a Philippine woman on death row for drug smuggling during a meeting with Philippine president Ferdinand Marcos Jr. in November 2024. The government later came up with the idea of a bilateral-prisoner transfer deal to make it possible.
Some scholars say his decision to join BRICS, an intergovernmental organization led by China, Russia and India, with little discussion and preparations, was another blunder, although it has not been a disaster.
Many seriously doubt now that joining Trump’s Board of Peace will confer any benefit for Indonesia and may be a betrayal of the Palestinian people and undermine Indonesia’s standing at home and abroad. It looks like another blunder, but one from which neither Prabowo nor the Foreign Ministry will be able to extract Indonesia.
