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 officially dismissed National Nutrition Agency (BGN) head Dadan Hindayana and his two deputies through a surprise announcement by the State Secretariat early last week, marking one of the most abrupt leadership changes of his administration. The move was soon followed by the Attorney General's Office (AGO) naming all three officials as corruption suspects in the program.
Dadan was replaced by former deputy Nanik Sudaryati Deyang. Meanwhile, deputy heads Lt. Gen. (ret.) Lodewyk Pusung and Insp. Gen. (ret.) Sony Sonjaya were replaced by Development Finance Comptroller (BPKP) deputy head Agustina Arumsari and Maj. Gen. Trenggono, vice president director of state-owned food company PT Agrinas Pangan Nusantara.
The removal of Dadan and his deputies represents one of the most significant personnel changes since the agency was established. Neither the Palace nor BGN initially provided a detailed explanation for the leadership transition. Shortly after the announcement, however, AGO investigators searched BGN's offices before arresting the three former leaders.
According to the AGO, the three suspects allegedly manipulated the verification process on the BGN partner portal to ensure that foundations selected as partners for the Nutrition Fulfillment Service Units (SPPG) were linked to BGN officials or employees. These foundations reportedly received incentives worth billions of rupiah daily and were allegedly affiliated with, and in some cases owned by, the suspects.
Yet the allegations of financial irregularities represent only one of the challenges facing the government's free meals program. Since its launch in January last year, the initiative has encountered a range of operational and structural problems stretching across the entire supply chain, from land acquisition and facility licensing to procurement, workforce development and food safety oversight.
Labor has emerged as a particularly sensitive issue. While the program is often framed as a food distribution initiative, its core objective is to improve nutritional outcomes among schoolchildren and other beneficiaries. Achieving that goal requires more than simply preparing and delivering meals; it demands personnel capable of managing food safety protocols, handling storage and logistics and ensuring that nutritional standards are consistently met.
Critics have argued that the rapid nationwide rollout of the program has at times outpaced the availability of trained workers and nutrition specialists needed to support such an ambitious undertaking. The consequences have been most visible in a series of food poisoning incidents that have occurred throughout the program's implementation.
The issue is closely tied to the program's quota-driven implementation model. Success has frequently been measured by the number of meals distributed each day, creating strong incentives for officials and operators to maximize output. Critics contend that such targets, while effective at accelerating expansion, can inadvertently encourage shortcuts in compliance procedures when administrative processes are perceived as obstacles to meeting delivery goals.
Whether the leadership change will be sufficient to address these problems remains an open question. While Dadan's removal may signal the government's willingness to respond to allegations of misconduct and growing public criticism, many of the challenges facing the free meals program are structural.
The alleged irregularities identified by the AGO did not emerge in a vacuum. They occurred within a program that has been under constant pressure to expand rapidly, establish new kitchens, increase meal production and broaden beneficiary coverage across the archipelago. Such conditions can strain oversight mechanisms, particularly when administrative capacity struggles to keep pace with the program's growth.
