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.
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Strengthening national defense has long been a priority for President Prabowo Subianto and dates back to his tenure as defense minister. There is no doubt about his administration’s focus on defense, given that the country has yet to achieve its 2009-2024 Minimum Essential Force (MEF) target. Yet the public continues to question whether the government’s efforts are genuinely aimed at safeguarding Indonesia’s sovereignty or attempts to extend military authority into civilian domains.
Defense spending has remained relatively high despite the administration’s budget efficiency policy. This year, the Defense Ministry received a whopping Rp 187.1 trillion (US$10.5 billion) from the state budget, making defense the second largest expenditure after the free nutritious meal program. The 2026 defense budget reflects a steady increase over the past five years. According to the Central Government Financial Report (LKPP), the Defense Ministry had a budget of Rp 125.9 trillion in 2021. This had grown to Rp 190.5 trillion by 2024, and its estimated realization stood at Rp 247.5 trillion for 2025.
As a symbolic demonstration of this defense strengthening strategy, on May 18 President Prabowo handed over six Rafale fighter jets, four Dassault Falcon 8X, one Thales mobile long-range radar and one Airbus A400M Atlas military transport aircraft to Indonesian Military (TNI) commander Gen. Agus Subiyanto during a ceremony at the Halim Perdanakusuma Air Force Base in East Jakarta. The handover came four years after Indonesia signed an $8.1 billion procurement agreement with France for 42 Rafale fighter jets, when Prabowo was defense minister.
Despite these historic hikes in nominal spending, Indonesia's defense budget remains chronically constrained when measured against total economic output, hovering at below 0.8 percent of gross domestic product. This lags considerably behind regional peers such as Singapore and Vietnam. This funding shortfall makes the military's expansion into nonconventional roles in domestic affairs particularly controversial, raising concerns among critics who view it as reminiscent of the New Order era, when the military controlled both the social and political spheres.
One notable example of this military shift is the government’s commitment to establish "territorial development battalions" across the country’s 514 regencies and municipalities. As of April, 155 of these battalions had been established. This initiative also has necessitated a significant increase in military recruitment, with around 24,000 enlisted soldiers (tamtama) to serve primarily in noncombat roles. The new battalions are tasked with supporting flagship government initiatives, including the free meals program, the Red and White Cooperatives, food security programs and local infrastructure development.
During a meeting on May 19 with House of Representatives Commission I, Defense Minister Sjafrie Sjamsoeddin said the members of territorial development battalions would also contribute to the social and religious life of surrounding communities. He explained that each battalion of approximately 1,190 troops included recruits with diverse backgrounds, from graduates of pesantren (Islamic boarding schools) to individuals trained in interfaith services.
Military involvement in civilian affairs is also creeping into local law enforcement. During a press conference at the Jakarta Police headquarters on May 22, authorities announced that the Jakarta Military Command would be actively involved in hunting down gangs of begal (street robbers) that were spreading fear across Greater Jakarta. While this might appear to be decisive response to public anxiety, mobilizing the TNI in a traditional policing role risks blurring constitutional boundaries and increasing potential human rights abuses.
Furthermore, the TNI is expected to extend its influence into higher education through the Finance Ministry’s Education Endowment Fund (LPDP), where soldiers will reportedly help instill nationalism among scholarship recipients.
Against this backdrop, the questions surrounding the steady increase in defense spending become harder to ignore. As the TNI increasingly extends its influence on civilian affairs despite limited resources, its future trajectory has emerged not merely as a rhetorical inquiry but also as a pressing national concern.
