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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.
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.
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President Prabowo Subianto wants Indonesians to enjoy free education from kindergarten through university. Few would dispute the objective of making education more accessible. The harder question is how the government will pay for it. The state has yet to fully fund a Constitutional Court order to extend free compulsory basic education to private schools, even as Prabowo adds free university tuition to a budget already carrying increasingly expensive signature programs.
Prabowo reaffirmed his commitment at a limited cabinet meeting at the State Palace on Sept. 23, calling for free education at state institutions from kindergarten through university. The proposal followed his statement five days earlier that education at state schools and universities should be free, with funding potentially coming from money recovered from corruption.
At the school level, however, much of that promise already exists. Basic and Secondary Education Minister Abdul Mu'ti has said that state schools from kindergarten through senior high school are effectively free through the School Operational Assistance (BOS) program, complemented by the Smart Indonesia Program (PIP) for students from poorer families.
The more pressing unfinished obligation lies elsewhere.
In May 2025, the Constitutional Court ruled that limiting free compulsory basic education to public schools created unequal access because limited capacity at public schools forces some children to attend private schools. It ordered the government and regional administrations to guarantee compulsory basic education without charging fees at both public and private, or community-run, schools.
More than a year later, that ruling has yet to be fully implemented. The estimated cost is around Rp 181 trillion (US$10.3 billion), while roughly Rp 71 trillion has been approved for 2026, requiring implementation to be phased according to the government's fiscal capacity.
Before completing that obligation, however, Prabowo is ordering another, potentially larger commitment: making tuition free at state universities.
The Higher Education, Science and Technology Ministry told House of Representatives Commission X in September that abolishing tuition for 2.83 million undergraduate and diploma students at state universities would require Rp 93.74 trillion a year, excluding postgraduate students. That works out to roughly Rp 33.1 million per student annually.
The figure is so large partly because state universities have become increasingly dependent on tuition revenue. For the country's 20 autonomous state universities, or PTN-BH, government support reportedly fell from around 19-20 percent of operating costs in 2015 to just 5-6 percent in 2024, with tuition increasingly filling the gap.
Free tuition therefore raises a question beyond simply eliminating what students pay: Who replaces the revenue on which universities now depend?
The Rp 93.74 trillion estimate could also be only the beginning. Some lawmakers have argued that eliminating tuition alone would not remove financial barriers because students still need money for housing and other living expenses. Lecturers have pointed out that tuition helps finance teaching staff, laboratories, libraries and research. Private universities could also face competitive pressure if state universities became free while they continued charging tuition.
These are legitimate concerns. But they also illustrate how quickly an apparently straightforward promise of free tuition can become a much larger fiscal commitment. And fiscal space is precisely what Indonesia lacks.
The 2026 state budget already allocates Rp 769 trillion to education. But that figure includes spending on Prabowo's free nutritious meal program, which has an allocation of Rp 335 trillion this year.
The Constitutional Court ruled in July that free meals program spending that is not a core component of education must eventually be separated from the constitutionally mandated education budget, no later than for the 2028 budget. According to calculations cited in the draft, education spending without the program would amount to only 14.2 percent of the budget, leaving a gap of nearly six percentage points, equivalent to around Rp 240 trillion, from the constitutional 20 percent allocation.
Meanwhile, the state budget deficit widened from Rp 164.4 trillion in April to Rp 240.1 trillion by August. The latter amounted to 0.93 percent of gross domestic product, with state spending already exceeding revenue by around Rp 240 trillion during the first eight months of the year.
This does not mean Indonesia should abandon the goal of affordable higher education. The question is whether free universal tuition is the most efficient use of scarce public money when the state has not yet fully financed its existing constitutional obligation at the basic education level.
The university proposal, as currently discussed, would subsidize all 2.83 million students regardless of their families' ability to pay. A more targeted scheme could concentrate assistance on students who cannot afford tuition, costing a fraction of Rp 93.74 trillion while preserving fiscal room to implement the Constitutional Court's ruling on basic education.
Free education from kindergarten to university is an appealing ambition. But every promise ultimately has to fit within the same state budget. With the free meals program, the Red and White cooperatives and other priorities already making large claims on public resources, the government needs to establish not only what education it wants to make free, but also which obligations should come first and who genuinely needs state support.
