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
As Indonesia continues to grapple with spreading wildfires and recurring haze, scrutiny has increasingly shifted toward corporate culpability, driven by investigative reports linking vast networks of foreign investors and multinational firms to the blazes. With Jakarta’s domestic response perceived as largely muted, neighboring ASEAN member states have begun mounting diplomatic pressure and pursuing independent investigations into the entities allegedly responsible for the transboundary haze choking the region.
Much of the recent attention stems from an investigation published by the Indonesian Forum for the Environment (Walhi), which identified nine corporations directly tied to major wildfire hot spots: PT Kayung Agro Lestari, PT Panca Surya Agrindo, PT Arjuna Utama Sawit, PT Sumber Mardhika Graha, PT Finnantara Intiga, PT Hutan Ketapang Industri, PT Mayawana Persada, PT Hermes Sugar Indonesia and PT Globalindo Alam Perkasa.
Walhi’s findings reveal that all nine maintain parent companies or principal shareholders based primarily in Singapore, Malaysia and Hong Kong, alongside additional financial links to the British Virgin Islands, Samoa and India. Given that Singapore and Malaysia bear the brunt of the cross-border haze outside Indonesia, these commercial ties are especially consequential.
Beyond these nine entities, an estimated 93 companies affiliated with Malaysian and Singaporean palm oil conglomerates have been implicated in the fires. Of these, 66 are linked to Singapore-headquartered giants - most notably Sinar Mas and Wilmar, which account for the largest shares - while the remaining 27 trace back to Malaysian conglomerates, specifically Sime Darby and Genting Group. These complex, cross-border ownership structures significantly complicate efforts to hold individual firms accountable, deepening regional frustration with Indonesia’s management of the perennial crisis.
Singapore, for its part, has escalated unilateral enforcement. Authorities have identified seven companies operating in Indonesia suspected of responsibility for the blazes, including PT Bumi Andalas Permai, PT Bumi Mekar Hijau and PT Paramitra Mulia Langgeng. The Singaporean government announced that these firms will receive preventive measures notices requiring them to deploy firefighting teams, halt all burning, refrain from igniting new fires, and submit formal action plans to Singapore’s National Environment Agency (NEA).
Domestically, amid persistent criticism over strategic shortcomings, the Forestry Ministry announced administrative sanctions against 32 companies accused of igniting concession fires. The penalties range from operational suspensions to outright license revocations and mandatory ecosystem restoration within affected concessions. However, transparency remains a hurdle, as the government has yet to release the names of the penalized firms.
Beyond immediate enforcement, the deeper structural drivers demand scrutiny. Today’s fires and resultant haze are the cumulative legacy of decades of peatland drainage and forest conversion - practices, as Walhi Executive Director Boy Jerry Even Sembiring emphasized, systematically enabled by state-issued concession permits.
Successive administrations have confronted this recurring crisis with varying degrees of resolve. During the presidency of Susilo Bambang Yudhoyono (2004–2014), massive fires in 2006 blanketed Malaysia and Singapore in severe haze and cost the country three million hectares of forest cover. A subsequent outbreak in 2013 prompted Indonesia to finally ratify the ASEAN Agreement on Transboundary Haze Pollution (AATHP) in 2014, following a rare public apology from Yudhoyono to neighboring nations.
Joko “Jokowi” Widodo’s tenure (2014–2024) saw catastrophic fires in 2015 that consumed roughly 2.6 million hectares - predominantly across Central Kalimantan - blanketing the region in toxic haze for months, followed by another severe outbreak in 2019 that burned 850,000 hectares. In response, Jokowi institutionalized a more centralized prevention framework, establishing the Peatland Restoration Agency and issuing Presidential Instruction No. 5/2019, which enacted a permanent moratorium on new concession permits across primary natural forests and peatlands.
Under President Prabowo Subianto, crisis management has thus far leaned heavily on operational interventions, such as mobilizing joint ground and aerial task forces and conducting cloud-seeding weather modification operations. Prabowo has also authorized the acceptance of foreign technical assistance, though the timeline and operational parameters of that deployment remain undefined.
Long-term resolution hinges on confronting the structural governance issues driving deforestation, particularly the entrenched link between concession fires and commercial plantation expansion. Between 2004 and 2017 under Yudhoyono, approximately 2.4 million ha of state forest land were released for commercial estate development, dominated overwhelmingly by oil palm. Under Jokowi, nearly 700,000 hectares of land were converted to oil palm cultivation.
While definitive conversion figures have yet to be established for the Prabowo administration, concerns over policy direction have already surfaced. Special Envoy for Climate and Energy Hashim Djojohadikusumo, who is Prabowo’s brother, recently proposed utilizing 12.7 million ha of "degraded forest" for expanded oil palm cultivation to meet the administration's aggressive B50 and B100 biodiesel mandates - a strategy that critics warn could further exacerbate concession-driven fire risks.
