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 moreOther Sectors
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
A series of corruption and fraud cases have been uncovered at several regional development banks (BPDs), including Bank Jabar dan Banten (BJB), Bank DKI Jakarta, Bank Jatim and Bank Jateng. These cases involve practices such as side streaming, fictitious debtors, hidden debtors and document forgery, resulting in losses amounting to trillions of rupiah. The revelations have raised serious concerns about weak corporate governance in the BPD sector.
Most recently, the Attorney General’s Office arrested Iwan Setiawan Lukminto, former chief commissioner of the now-bankrupt PT Sri Rejeki Isman (Sritex), naming him a suspect in a corruption case. Also implicated were Zainuddin Mappa, former president director of Bank DKI, and Dicky Syahbandinata, former head of the corporate and commercial division at Bank BJB.
Zainuddin and Dicky were accused of disbursing loans to Sritex in 2020 of Rp 543.98 billion (US$33.33 billion) from BJB and Rp 149 billion from Bank DKI, without collateral. The loans turned non-performing and were never repaid until Sritex’s bankruptcy in October of last year. These loans were part of a broader Rp 3.5 trillion in unpaid syndicated loans to Sritex, which also involved Bank BNI, Bank BRI and the Indonesia Eximbank (LPEI).
In addition to the flawed lending process, Sritex allegedly misused the loans it received. Though the funds were meant to support working capital, the textile firm reportedly used them to refinance its mounting debts and possibly to purchase non-productive assets.
For context, Sritex recorded a net profit of US$85 million in 2020. However, starting in 2021, the company experienced a dramatic downturn, posting a substantial loss of $1.074 billion. During this period, its cash ratio plunged from 47 percent to just 0.55 percent, reflecting dire performance, with cash and cash equivalents fell by 93 percent, while current liabilities tripled. By the time Sritex was declared bankrupt in October 2024, its total debt was estimated at Rp 19.9 trillion.
Bank BJB is also entangled in another corruption case involving media advertising budgets from 2021 through 2023. The case allegedly caused financial losses of Rp 222 billion, due to discrepancies between the agency's actual media placement payments and the amounts paid by BJB, totaling Rp 409 billion. Moreover, the procurement process was reportedly marred by covert agreements to award contracts to predetermined media outlets. The Corruption Eradication Commission (KPK) has named five suspects for the case and searched the residence of former West Java governor Ridwan Kamil.
At Bank Jatim, a corruption case involving fictitious credit totaling Rp 569.4 billion at its Jakarta branch led to the replacement of its CEO. Shareholders, especially the East Java local government, appointed Winardi Legowo from state-owned Bank Mandiri as the new CEO. The case centered on loans issued to construction firms PT Inti Daya Group and PT Indi Daya Rekapratama, backed by fabricated invoices purportedly from state-owned enterprises (SOEs) to create the appearance of contractual agreements. Four individuals, including the Jakarta branch head Benny and directors of the involved companies, have been detained.
Bank Jatim, one of the largest BPDs, reported a net profit of Rp 1.28 trillion in 2024, with credit growth reaching 16.98 percent, well above the industry average of 10.39 percent.
Corruption cases across several BPDs reveal recurring violations of key prudent banking practices. According to a KPK analysis of fraud samples from BPDs between 2013 and 2023, common schemes include side streaming, fictitious debtors, hidden debtors and forged documents. Additional cases involve unsecured loans granted to politicians. Between 2015 and 2024, for instance, BPDs extended Rp 20.86 billion in loans to regional councilors.
The banking industry fundamentally relies on prudence to safeguard depositor trust and generate sustainable profits. If BPDs continue to neglect responsible credit extension practices, they risk not only compromising their own operations but also eroding the integrity and stability of the national banking sector.
