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

September 17, 2026

Indonesia’s recurring wildfires have once again spiraled into a crisis that reaches far beyond its forests and peatlands. As dense haze shuts down schools, endangers public health, and chokes local economies at home, smoke from fires across Sumatra and Kalimantan has drifted across national borders, blanketing parts of Singapore, Malaysia, Brunei, and the Philippines. What has long been treated as an unfortunate, seasonal environmental headache is morphing into a thorny test of governance, and an escalating diplomatic liability for Jakarta.

The scale of this year’s burn is staggering. Data from Nusantara Atlas shows a dramatic surge in cumulative hotspots in late August, leaping from 190,571 on Aug. 22 to 294,699 just a day later. By Sept. 10, that tally had topped 301,990, with Kalimantan recording the highest density of active blazes. The emissions tell an equally grim story. According to the European Union’s Copernicus Climate Change Service, Indonesia’s wildfires released an estimated 19.7 million metric tonnes of carbon dioxide between Sept. 1 and 7 alone, accounting for more than a third of all wildfire emissions worldwide during that period.

By July, roughly 202,000 hectares had already burned, according to data cited by Reuters. That damage expanded sharply through August, with total burned area estimated to have reached 600,000 ha, concentrated largely in Kalimantan, Sumatra, and South Papua. A potent El Niño has undoubtedly exacerbated conditions, ushering in parched, blistering weather that allows fires to ignite and spread with ease. Yet weather alone cannot shoulder the blame for a disaster that returns like clockwork.

Forestry Minister Raja Juli Antoni has openly acknowledged that many of these fires were set intentionally by individuals and corporations. Slashing and burning remains the cheapest, easiest method for clearing land in rural Indonesia, particularly where peatlands and native forests are systematically converted into oil palm and pulp plantations. This reality shifts the underlying debate: The issue is not simply whether Indonesia can respond to extreme weather, but whether it possesses the political will to stop illegal burning and hold perpetrators accountable.

Authorities have started taking legal steps. The Forestry Ministry recently handed down administrative sanctions to six Forest Utilization Business Permit holders after fires scorched 1,511.55 ha across their concessions in West, Central, and East Kalimantan. Five of these companies received government-enforced compliance orders. A sixth, PT MPK, had its operating permit suspended alongside an enforcement order after investigators discovered extensive, recurring burns across its land.

Yet enforcement remains the ultimate bottleneck: identifying the actual culprits behind the blazes and imposing penalties severe enough to serve as a genuine deterrent.

At home, the toll is devastating. More than 1.4 million students have been forced back into remote learning due to toxic, hazardous air. In Palembang, South Sumatra, the closures disrupted around 250,000 students across 1,030 schools. Meanwhile, health authorities recorded more than 50,000 cases of acute respiratory infections across seven provinces between July and August alone.

A recent assessment by the Center of Economic and Law Studies (CELIOS) estimated the combined economic and healthcare losses from the January–August fires at Rp 39.3 trillion (US$2.25 billion) to Rp 123.1 trillion. The upper end of that estimate represents nearly half, 49.1 percent, of Central Kalimantan’s projected 2026 regional GDP.

The fallout, however, does not stop there. Malaysia has felt the brunt of the drifting plume. On Sept. 4, authorities declared an emergency in Serian, Sarawak, as air quality deteriorated to hazardous levels, shuttering schools across the state. The haze has even reached the Philippines, pushing air quality readings in Manila into unhealthy territory. Faced with fouled air, Malaysia and Brunei have moved to escalate the matter through regional channels, reviving diplomatic frictions that have simmered for decades.

On paper, ASEAN possesses a tailored mechanism for precisely this challenge: the ASEAN Agreement on Transboundary Haze Pollution (AATHP), adopted in 2002 and ratified by Indonesia in 2014. The pact outlines clear protocols for monitoring, prevention, emergency response, and joint mitigation. Yet the treaty cannot supplant domestic law enforcement. Pinpointing who lit a blaze, proving whether a concession holder failed to safeguard its perimeter, and meting out punishment remain sovereign duties.

Herein lies the regional framework’s greatest limitation. ASEAN can streamline satellite data and coordinate disaster teams, but it cannot march into an Indonesian concession to enforce the law. A regional accord can mitigate the fallout from a haze crisis; it cannot dismantle the economic incentives that ignite the fires in the first place. Regional coordination is underway. In late August, the ASEAN Specialised Meteorological Centre triggered a Level 3 alert for the southern ASEAN region, signaling intense fire activity and an imminent risk of severe transboundary haze.

Indonesia has navigated major haze crises before, yet the skies continue to darken every dry season. For a public weary of choking on smoke and increasingly skeptical of official assurances, deploying more water-bombing helicopters is no longer enough. Meaningful progress requires naming names, prosecuting offenders, and ensuring corporate negligence carries real, biting costs. The most urgent test ultimately rests with Jakarta: proving it can stop the next fire before it turns into yet another national emergency and regional embarrassment.

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