The Complex Strategy Behind Indonesian Rice Exports

The Complex Strategy Behind Indonesian Rice Exports

  • InCorp Editorial Team
  • 11 August 2022
  • 4 minute reading time

A researcher from Lembaga Penyelidikan Ekonomi dan Masyarakat or the Institute for Economic and Community Research, Dr. Ir. Riyanto, revealed that the Indonesian Minister of Agriculture has been dramatically successful in increasing the national rice production.

The increase in national rice production allowed Indonesia to hold back on imports for three consecutive years. He further elucidates that under Syahrul Yasin Limpo’s guidance, the Indonesian rice supply has been sufficient to satisfy national demand and has even been in surplus amounts.

Agriculture has always been the most strategic sector in realizing Indonesia’s sovereignty. Food supply is an integral part of a nation that is often overlooked and underestimated. By adhering to all the directives of President Jokowi, Indonesia finally finds itself in a good place.

The positive impact of this is felt by various stakeholders, especially farmers who have experienced an increase in their general welfare alongside the progress of the Indonesian agriculture sector.

The astounding growth is seen as Indonesia went from importing approximately 2 tons of rice annually to exploring plans to export 200,000 tons of rice to China and other countries in the coming months.

An expected impact is controlled inflation as the domestic food and beverage industry has been handled well. This optimism is also rooted in the expectation that climate change will not significantly impact domestic food production.

Rice Exports Agreement Between China and Indonesia

2.5 Million Tonnes of Rice Exports to China

Plans for Indonesia to export rice to China are already in motion. Limpo has already met with representatives of China to discuss an annual export of rice reaching 2.5 million tons. This is an attempt to make the best use of the momentum, considering we have been putting an end to the long reliance on imported rice.

Aside from that, the Food and Agriculture Organization is also giving Indonesia an award for being one country that can demonstrate food security and resilience. This is the primary proof that Indonesia is now able to meet the domestic demand for rice and provide the global market through exports. Memorandums of Understanding are to be drawn up in the coming weeks on this transaction.

The Complex Strategy Behind Indonesian Rice Exports

Challenges Behind Rice Export Plan in Indonesia

The world is currently facing a food crisis. Even if some hold the opinion that we are now not in the midst of an emergency, we are indeed entering it soon, according to Edward Tannur, a member of Commission IV of the Dewan Perwakilan Rakyat or the House of Representatives.

He points out several export restrictions in place by leading food-producing countries due to the circumstances. The basis of this is the readiness of the rice fields and the reality in the field, which includes the supply of agricultural equipment, fertilizers, and other factors that directly affect production.

He also challenges rice export plans by pointing out how China does not lack rice. Therefore he believes we should be realistic in our projects and not overly optimistic.

The reality of the present circumstances is that the transaction is far from fixed and is subject to further discussions during the internal meeting with the President.

The President has also clarified to his ministers that food quality is of utmost importance. He is focused on making Indonesia self-sufficient in the food sector.

Managing Food Stability in Indonesia

Considering there has been a large request for rice from various countries, Jokowi has urged the government to focus on increasing production on a large scale. This increase will be done by coordinating with farmers, corporations, and state-owned enterprises.

He emphasizes that we should never be fulfilled in what we have and be trapped in it; instead, we should continuously improve. He also says that a suitable mechanism should be decided and put in place to avoid food wastage.

The President also endorses diversification of food commodities in various areas to ensure food stability. The global food crisis is predicted to occur soon and is marked by a steep increase in commodity and food prices.

Cekindo provides product registration and company registration services for companies looking to take part in securing Indonesia’s food supply and ensuring stability.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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