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
Pos Indonesia, the country's oldest state-owned enterprise (SOE), has come under renewed scrutiny following the resignation of its president director, Daud Joseph, after only three months in office. His departure was followed by allegations of governance irregularities, including suspected manipulation of the company's financial statements, prompting state asset fund Danantara to launch an audit. The episode underscores the persistent weaknesses in SOE governance that have contributed to the sector's underperformance for years.
Joseph was appointed president director on March 11 after previously serving as operations and safety director at Transjakarta. He filled a leadership vacancy that had been occupied by an acting president director for nearly a year. On June 22, however, Joseph resigned, saying Pos Indonesia required a leader with more specialized expertise to carry out the company's transformation.
His resignation came amid a sharp deterioration in the company's financial performance. Pos Indonesia's revenue fell by 20 percent in 2025, declining from Rp 5.02 trillion (US$286 million) to Rp 3.97 trillion. This was well below the company's five-year average revenue of Rp 5.06 trillion and marked its lowest annual revenue since 2013. Consequently, gross profit declined to Rp 1.5 trillion.
The decline was driven partly by lower logistics revenue from government social assistance distribution programs, including cash, rice and food aid, which fell to only Rp 300 billion. Beyond government-related services, Pos Indonesia also recorded weaker revenue from its logistics, courier and property businesses. By the first half of 2025, the parent company had posted an operating loss of Rp 37.92 billion. Operating cash flow also remained under pressure, with a negative balance of Rp 677.52 billion, extending a trend that began in 2024.
Beyond its weakening financial performance, governance failures have created additional risks for the company. In June 2025, Pos Indonesia disclosed estimated losses of Rp 37.73 billion resulting from employee fraud, up from Rp 34.49 billion estimated at the end of 2024. Around half of the estimated losses originated from the company's Makassar regional office. These figures remain subject to an ongoing audit as investigators examine misconduct that accumulated over several years.
Employee fraud has repeatedly surfaced within Pos Indonesia, ranging from the misappropriation of social assistance funds to broader operational misconduct. Last month, authorities arrested a fugitive linked to corruption in the distribution of funds under the Family Hope Program (PKH) in Cirebon, a case that caused state losses of Rp 264.55 million. Another corruption case in Bengkulu involved the misuse of stamp duty revenue and pension funds between 2022 and 2024, resulting in estimated state losses of around Rp 3 billion.
These recurring governance failures stand in stark contrast to Pos Indonesia's financial recovery after 2019. The company successfully reversed a comprehensive net loss of Rp 104.38 billion in 2019 into a comprehensive net profit of Rp 839 billion in 2024. However, the downturn appears to have resumed, with comprehensive net income reaching only Rp 144.74 billion in the first half of 2025.
The combination of deteriorating financial performance and suspected governance failures has prompted Danantara to intervene. The sovereign wealth fund plans to appoint a new management team to restore Pos Indonesia as a financially healthy, professionally managed and accountable company. Since its establishment, Danantara has consistently emphasized improving governance standards across SOEs by strengthening financial reporting and enforcing accountability for misconduct.
Nevertheless, the impact of these reforms has yet to become evident. Several major SOEs, including MIND ID and Telkom Indonesia, reported weaker financial performance in 2025. Questions have also emerged over Danantara's own reporting practices. For example, Danantara reported Bank Rakyat Indonesia's (BRI) profit at Rp 21.2 trillion for the first four months of this year, while the bank's official financial statements recorded net profit of Rp 15.9 trillion, raising concerns about data consistency and transparency.
The problems at Pos Indonesia should therefore not be viewed as an isolated corporate failure, but as a reflection of longstanding structural weaknesses in Indonesia's SOE governance framework. Unless these underlying issues are addressed, governance reforms under Danantara are unlikely to deliver lasting improvements in SOE performance.
