Agriculture in Indonesia

Agriculture in Indonesia

Agriculture is key to the economy of Indonesia, where it accounts for 43% of total employment and directly contributes 15% to the GDP. Despite its importance and role in the national economy, national food production is still insufficient to meet the food security needs of Indonesia’s citizens. USAID programs address the problem of food insecurity in several ways. They seek to improve the value chains for key high-value crops; introduce and disseminate agricultural biotechnology and improve management practices, and build the capacity of public and private institutions.
Agricultural Value Chains–High-value agriculture products have real potential to drive growth, employment, and incomes. In Indonesia, the competitiveness of this sector is constrained by low investment, inadequate infrastructure, and underdeveloped agribusiness practices. USAID has two programs that are working in high-value agriculture. A 5-year, $20 million agricultural market development project will continue USAID’s prior work in developing Indonesia’s agricultural sector through strong, well-developed value chains.
While a preceding program reached more than 190,000 individual farmers, 3,700 producer groups, and 200 agribusinesses, the new program will work with over 250,000 participant farmers on three value chains: high-value horticulture (including vegetables, fruits and flowers), cocoa, and coffee. USAID is also providing additional support for agricultural development in Papua, one of Indonesia’s least developed provinces. A new program there will work to develop markets and value chains in the cocoa, fisheries, and small livestock sectors.
Biotechnology and Improved Management Practices–Biotechnology offers much-needed opportunities to increase yields while decreasing labor and input costs for the farmer, including money spent on pesticides and fertilizers. It offers great opportunities in particular for poor farmers. One USAID-supported program is working to develop a locally-adapted variety of Golden Rice, which will provide beta-carotene, combating a micronutrient deficiency that often leads to blindness and other health complications in rural areas. Another program is developing a potato resistant to late blight.
Altogether, the adoption of biotechnology-enhanced varieties and improved farming practices increases yields, improves farmer incomes and livelihoods, and is better for the environment. Additionally, USAID programs support and build the capacity of the Government of Indonesia’s National Council on Biosafety, which regulates how biotechnology-enhanced crops are introduced and grown in Indonesia.
Capacity Building: To fully achieve its potential, Indonesia must build its cadre of trained professionals in key areas, notably economics and agriculture. USAID programs establish vital linkages between U.S. and Indonesian universities, and support the training of dozens of Indonesia’s future economic and agronomic leaders each year in U.S. land-grant universities. These students will return to Indonesia fully trained in their professions and better equipped to steer Indonesia to a more prosperous future.