Agriculture

Agriculture is one of the potential sectors in Indonesia. Thanks to its size and volcanic activity, Indonesia has abundant fertile soil and it is a major global producer of many  tropical agricultural products. 

  • Five decades have seen an increasing share of land devoted to agriculture
  • Huge water resources, but only 85% of people have access to improved water sources
  • Low worker efficiency and low machinery use
  • Government priority for Indonesia to be self sufficient in food production
  • One of the world’s biggest producers of rice, fruits, cereals and palm oil

 

  2010 2011 2012 2013 2014/td>
Agriculture growth (annual percent change) 2.9 <3.0 4.0 3.4′ 2.4′

Source: World Bank

Agriculture Gross Domestic Product (GDP)

Although agriculture’s share of the country’s gross domestic product (GDP) has declined markedly during the past five decades it still provides jobs for majority of the rural population. Indonesia has 1.811.570 sq. kilometers of land (the 15th largest worldwide) and agriculture represents 30% of the land — 545.000 square kilometers. In the 1960s,  agriculture only accounted for 21 percent, rising to almost 25 percent in the mid-1980s. Indonesia’s arable land ranks 13th largest in the world, with 23.5 million hectares.

Forested areas represent 51.7% of land, making it the 8th largest globally, with 947.5 sq. km. Indonesia is also rich in water resources, ranking 5th on planet,  however only 84.3% of inhabitants have access to improved water sources. In 2012, this sector employed around 49 million Indonesian people, which represents 41 percent of the total Indonesian labor force. Agriculture workers are not very efficient as the added value is US$979 per worker (132nd on the planet) and in 2010 there were 2 tractors per 100 sq.km of arable land. Machinery and mechanization are still big opportunity areas in Indonesia, where demand for food is increasing.

The Big Five of Palm Oil Producers 2012

Commodity Country Production (000 tonnes) %
Crude Palm Oil Indonesia 23.672< 47,1
  Malaysia 18.785/td> 37,4
  Thailand 1.600 3,2
  Colombia 966 1,9
  Nigeria 940 1,8
Palm Kernel Oil Indonesia 2.581 42,6
  Malaysia 2.014 33,3
  Nigeria 556 9,2
  Thailand 165 2,7
  Brazil 117 1,9
Palm Kernel Indonesia 6.540 44,6
  Malaysia 4.850 33,0
  Nigeria 1.200 8,1
  Thailand 368 2,5
  Colombia 213 1,4

Source: FAOstat

Agriculture Sector Focus

Indonesia’s agricultural sector is focused on the following main products: Palm oil, rubber, cocoa, coffee, tea, cassava, rice and tropical spices. Large plantations are state owned as well as private and smallholder productions. The Indonesian government has placed self sufficiency in certain agricultural products high on the agenda. This applies to rice in particular, which by far is the main staple food for the majority of the population. Indonesia has the highest per capita rice consumption in the world, but it is still dependent upon imports. The government program has a long way to go before it realizes this change. Indonesia and Malaysia dominate in palm oil production, together representing 85-90% of global production. Demand, as well as palm oil plantations, are still increasing. This has a drastic effect on the environment, including forests, soil and some endemic species such as the Sumatran tiger.

Indonesia ranks 5th in fruit and cereals production, almost 18 million tons of fruits and 88.5 million tons of cereals produced annually. Rice production is the 3rd  largest in the world, with 69 million tons annually.

You can continue reading about :

Food and Beverages in Indonesia.

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