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.
View moreAgriculture
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 spent much of the first year since his October 2024 inauguration trying to fulfill his campaign promises, but he has also been quietly consolidating power over his political detractors, with a little help from his Army friends.
When he took office 12 months ago, he shared power by setting up the country's largest and most diverse coalition government that includes just about everyone who matters in national politics.
Winning the 2024 election with a convincing majority, he has shared the spoils with not only those who helped his campaign but also the losers. Prabowo has parceled out strategic positions in the government, including posts in state-owned companies, to buy their support, if not loyalty. He has even expanded the size of the cabinet to over 100 ministers and deputy ministers to accommodate this strategy, breaking the maximum limit of 40 previously prescribed by law.
His administration could be almost called a national unity government if the Indonesian Democratic Party of Struggle (PDI-P) had not turned down his offer to join. While it is the only one out of the eight political parties in the House of Representatives that is not part of the coalition government, but PDI-P has hardly played the role of an effective opposition.
Prabowo's coalition government comprises the seven other political parties including his own Gerindra Party, as well as special interest groups representing businesses, Islamic organizations and the Indonesian Military (TNI) and the National Police (Polri). Although the latter two are constitutionally answerable to the president, they are powerful institutions whose interests no leader can ignore. One notable absence is labor unions, but they are weak and ineffective and thought to be of little strategic value.
Prabowo has pretty much gotten what he wanted in the last 12 months, including his legislative agenda, with the parties in his coalition controlling over 80 percent of House seats.
While he faces no real challenges from political institutions, criticism has come from less organized movements such as youths and students, who have turned to social media to air their grievances through popular memes and hashtags like #IndonesiaGelap (Dark Indonesia) and #KaburAjaDulu (Leave first). Many people displayed the Straw Hat Pirates flag from manga One Piece, symbolizing Gen Z defiance, in place of or next to the national flag during Indonesia's 80th independence anniversary.
Later in August, these online grievances erupted into offline mass protests and riots nationwide in the first biggest test to Prabowo's presidency. He responded by quickly deploying the military to the streets to quell the violence, effectively taking over the police's job.
While he appears to have things under control, the most serious challenge to his power has come from within his administration, from a faction that has no name but clearly has the largest clout.
This is the faction representing the interests of predecessor Joko "Jokowi" Widodo, who continues to pull strings through his eldest son, Vice President Gibran Rakabuming Raka, and more than10 ministers that were carried over from his cabinet. He also wields influence strings through the seven political parties in Prabowo's government, particularly Golkar, the largest among them, and through several Supreme Court and Constitutional Court justices appointed during his 10-year term. Meanwhile, the leadership of the Corruption Eradication Commission (KPK) is composed of figures installed just a few weeks before he stepped down in October 2024.
The power struggle between the sitting and former presidents became apparent when Prabowo replaced five of Jokowi-appointed ministers following August's violent protests. But his plan to reform the police was foiled when National Police chief Gen. Listyo Sigit Prabowo, another Jokowi appointee, set up an internal reform committee before he could set up one of his own. Jokowi's power may be weakening, but he still calls some of the shots.
Prabowo has been building his power base not so much through Gerindra, but by opening the doors for the military to fill strategic posts in the civilian government. The House swiftly revised the TNI Law by not only extending the mandatory retirement age for military officers to 65 but also expanding the number of civilian agencies where active-duty officers can serve to 16. He has also appointed long- and recently retired military officers to some of these strategic positions.
In August, he inaugurated six new Army military regional commands to bring their total to 21, giving the TNI authority to oversee domestic security, which is technically the police's domain. The Army has also received the green light to create 100 new battalions, with recruits being trained in not only military skills but also civic jobs.
Prabowo once said that in Jokowi, he had the best political mentor to prepare him for the presidency. He served as Jokowi's defense minister in 2019-2024, when he had a close-up view of how manage a big coalition and reduce the opposition's strengths. He has followed that style of governing in running an even bigger coalition, and has now perfected the art of coalition management by drawing the military closer to the center of power.
Underpinning the ongoing power struggle is the 2029 presidential election. But Prabowo must still deliver on his campaign promises over the next four years, including his ambitious 8 percent economic growth rate, to have any chance at getting reelected, assuming that this is indeed his intention.
