Indonesia is world’s leading producer of palm oil as well as a leading global producer of other commodities such as rubber, cocoa, and coffee. Indonesia is a rich country in fertile land ideal for growing different ranges of crops for both export & domestic consumption. However, these are export crops that have come to direct land use and employment to take the advantage of peaks in global commodity prices. In addition, country is heavily reliant on imports for staple goods for instance wheat, soybeans and sugar which have increased the issue of food security on the national agenda as globe food prices have continued to climb. Improving the productivity of Indonesian government & privately owned plantations, in addition to small-hold farmers through the adoption of technology and land consolidation is an additional issue to contend with that requires striking a weak balance in a sector that employs more than 40% of the workforce.
Agricultural sector is vastly fragmented in the country, which is made up of state owned estates recognized PT Perkebunan Nusantara (PTPN), small hold farmers and large scale private plantations. Palm oil is a leading sub-sector as well as rubber, cocoa, and coffee that are mainly exported. Staple crops including sugar, corn, and rice alongside vegetables for domestic consumption are mostly carried out by small holding farmers. Improving self-sufficiency in the key foodstuffs is a priority for the agriculture sector as imports of key crops for instance sugar and wheat are increasing. Particularly, for wheat, the country is almost completely reliant on imports from markets for instance Australia and is the major importer of the crop in South East Asia.
According to study, “Indonesia Agriculture Market Trends, Statistics, Growth, and Forecasts” states that the country has made energies to integrate new agricultural technologies to expand the sector’s efficiency and increase land output.
The market is driven by increases in rice & corn production. Country’s coffee bean producers record a favorable performance and are anticipated to continue on growth path due to strengthening domestic demand. However, limited water supply may impact the market. Moreover, policy support for promoting rain-fed farming is a key opportunity for market. Furthermore, increase in investment in agriculture for modernizing the food system is a major trend for market. These investments help to improve the country’s food production as well as enable households to engage in more productive sector & earn a better income. Synergies between policy and investment goals must be attained to create more opportunities & efficiencies in achieving food security for society as a whole. Indonesia country report examines the potential for agricultural sector investments to generate faster agricultural as well as economic growth and to improve the food security. It is expected that Indonesia can virtually end hunger by 2030 with a combination of higher investments in agricultural research & development (R&D), water use efficiency (WUE) and irrigation expansion, and rural infrastructure like electricity, roads, and railways.
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Ankur Gupta, Head Marketing & Communications