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
In a surprising turn of events to cap off the year, Nahdlatul Ulama (NU), Indonesia's largest Muslim organization, has been shaken by turmoil that many observers are calling an internal coup. At the center of the storm is the sudden political ousting of Yahya Cholil Staquf as chairman of NU’s executive body Tanfidziyah.
The catalyst for his removal was Yahya's invitation of Peter Berkowitz, an academic described by critics as having ties to an "international Zionist network", to an internal NU event in August. Yahya, who has a history of engagement with Israel, apologized for the invitation, but it was to no avail.
While Yahya has refused to yield his position, the Syuriah, the organization’s supreme council, moved unilaterally. In an official plenary session held in Jakarta on Dec. 9, the council named senior NU cleric Zulfa Mustofa as the group's acting chairman. The move carried significant political weight, evidenced by the attendance of high-profile government officials and senior NU members: Religious Affairs Minister Nasaruddin Umar, Social Affairs Minister Saifullah Yusuf and East Java Governor Khofifah Indar Parawansa.
At face value, the move against Yahya appears paradoxical. Since his election as chairman of PBNU’s Tanfidziyah in 2021, Yahya has been widely perceived as a staunch ally of the ruling government. Under his leadership, NU has taken pragmatic, some say controversial, steps to align with state policies. Most notably, this included accepting mining concessions under a government scheme allowing mass organizations to manage coal mines.
This concession was formalized through a controversial revision of the Mining Law earlier this year. The law was ratified in just three days without meaningful public or expert consultation, sparking significant backlash. Supporters framed the deal as a path to financial independence for NU, while critics viewed it as a moral compromise that tethered the religious organization too closely to extractive interests and state patronage.
That said, internal power struggles are not new to the current political climate. Late last year, when President Prabowo Subianto was still president-elect, the Indonesian Chamber of Commerce and Industry (Kadin) underwent a similar upheaval. Its then-chairman, Arsjad Rasjid, who had led rival candidate Ganjar Pranowo's campaign, was ousted in favor of the Prabowo-backed Anindya Bakrie. Arsjad initially contested the move as unconstitutional but eventually stepped aside after a compromise was reached.
However, the current NU debacle presents a crucial difference. The Kadin coup was a move against a political rival. Yahya, by contrast, has given no indication of opposing state authority. If Yahya is indeed aligned with the government, why has he become the target of an internal purge?
Observers point towards a proxy war between business factions. One faction within NU is believed to be close to Garibaldi ‘Boy' Thohir, a prominent coal magnate and brother of Youth and Sports Minister Erick Thohir. Another faction is linked to Hashim Djojohadikusumo, a key political financier and Prabowo's brother. Yahya has often been associated with figures close to Hashim, raising the question: why would a faction linked to the President's inner circle allow, or perhaps even orchestrate, his removal?
The contradictions deepen when considering the role of former vice president Ma'ruf Amin. A senior NU cleric, Ma'ruf has long been one of Yahya's most important allies. Yet, Yahya's replacement, Zulfa Mustofa, happens to be Ma'ruf's nephew. Zulfa claims he received his uncle's blessing to assume leadership.
This claim, however, clashes with the former vice president's public stance. Ma'ruf has openly rejected the manner of Zulfa's appointment, declaring Yahya's ousting illegitimate. He argues that under the group's constitution, a change in leadership cannot occur through a mere plenary session; it requires an Extraordinary Muktamar (Congress), reserved for emergency situations.
With NU now effectively split into dual leaderships, and Yahya continuing to assert his legitimacy, the organization is trapped in a stalemate marked by paradoxical power plays. Given the magnitude of the rift, it remains to be seen whether the Prabowo administration will intervene to resolve this quiet coup d'état.
