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
Students from Indonesia’s leading universities have once again taken to the streets in Jakarta and other major cities, about eight months after the last wave of mass protests turned violent. This time, they are specifically targeting President Prabowo Subianto’s leadership and governing style, which they blame for the country’s current economic difficulties.
Unlike in previous protests, however, the Indonesian Military (TNI) was deployed from the outset to help manage the situation amid growing calls from some government critics for political change. Despite a few minor scuffles, the demonstrations on June 12 remained largely peaceful, with both protesters and security forces exercising restraint.
Student leaders have vowed to return to the streets after giving Prabowo an opportunity to respond to their five-point list of demands. They also plan to reassess their strategy in light of the military’s involvement. The following Monday, additional student groups, joined by civil society organizations, staged demonstrations in Jakarta, suggesting that public dissatisfaction extends beyond university campuses.
The movement in Jakarta was led by the “Yellow Jackets,” a group of students from Universitas Indonesia, the country’s premier public university. They were joined by students from other public and private universities in the capital, as well as in several major cities across the country.
Under the banner “Toward a Bankrupt Indonesia,” the students are demanding that the government stop squandering state funds, reduce the prices of food and fuel and roll back the President’s flagship programs, including the free nutritious meal program and the establishment of the Red and White Rural Cooperatives program. They are also calling for an end to the military’s involvement in civilian affairs and for the President to acknowledge and take responsibility for policy mistakes.
The protests come amid an economic downturn marked by the rupiah’s decline to historic lows of more than Rp18,000 against the US dollar and a fall in the Jakarta stock market.
Analysts say that what began as a loss of confidence among foreign investors has spread to Indonesia’s middle class. The lower middle class, represented in part by the student movement, has expressed its frustration by taking to the streets. Analysts also point to an erosion of political confidence amid signs of shrinking civic space and the expanding role of the TNI in civilian affairs.
The protests last August targeted the House of Representatives over its perceived poor performance, particularly after legislators approved generous increases in their housing allowances. Students were soon joined by workers, and police attempts to crack down on the demonstrations led to violence that spiraled out of control. Prabowo subsequently ordered the military to help restore order.
This time, the military was deployed immediately as a backup force to assist the police.
In Jakarta, security forces were deployed to prevent students from staging their protest at the Hotel Indonesia Traffic Circle on Jalan Thamrin, the city’s main thoroughfare. Instead, they were directed toward the House of Representatives complex in Senayan. Student leaders, however, said the House was not their intended target.
Presidential Palace chief spokesman Mohammad Qodari said the students’ demands were broadly aligned with Prabowo’s efforts to make government spending more efficient and effective. He added that the free meals program was also under review following recent changes in the agency responsible for its implementation.
Qodari, however, did not address concerns about the military’s expanding role in civilian affairs, an issue that also featured prominently during the August protests.
For now, tensions remain contained. But with student leaders promising to reassess their strategy and public dissatisfaction showing few signs of easing, the prospect of renewed demonstrations cannot be ruled out.
