Agriculture in Indonesia - statistics & facts
Indonesia’s vast and diverse land, spanning thousands of islands as the world’s largest archipelago, provides a significant advantage for its agricultural sector, which plays a pivotal role in its economy. Indonesia is one of the world’s largest producers and exporters of agricultural products, supplying important commodities such as palm oil, natural rubber, cocoa, coffee, rice, and spices to the rest of the world. Not only contributing over 12 percent to the national GDP, agriculture is also the largest sector of employment for millions of Indonesians.
The demand for fish and meat is also increasing steadily. Indonesia is the second-largest producer of poultry birds in the Asia Pacific region and one of the world’s largest seafood producers. Despite this, the fisheries sector contributed less than three percent to Indonesia’s GDP even though 77 percent of its geographical area is made up of ocean waters. Realizing the unexplored potential of the marine sector, the Indonesian government is focusing the country's attention on this sector as part of the country's goal to make Indonesia a global maritime axis.
As for the forestry sector, Indonesia is one of the world’s largest exporters of tropical timber products, ranging from plywood, pulp, and paper which are used to produce furniture and handicrafts. This subsector, however, is expected to grow slower in the future as Indonesia attempts to decrease its deforestation rates.
In recent years, Indonesian ‘agripreneurs’ and the government have been transforming the agricultural sector by establishing collectives and using modern farming methods. However, challenges such as increasing demand for food traceability and the impact of climate change are already taking a toll on Indonesia’s agriculture. To remain competitive, the country needs to accelerate the adoption of digital technologies in its agricultural practices. This could help shorten the long distribution chain from farmers to consumers, reduce its large carbon footprint, and enhance Indonesia’s position in the global agricultural market.
Indonesia's key agricultural subsectors
As one of the world’s largest producers of crops like palm oil and natural rubber, Indonesia’s crop production is vital to its economy. However, rice production, a staple food crop, has seen stagnant growth over the past years, with a decline in 2023. This obstacle, coupled with Indonesia’s rapid population growth, poses a significant challenge in meeting the increasing food demand and ensuring food security in the country.The demand for fish and meat is also increasing steadily. Indonesia is the second-largest producer of poultry birds in the Asia Pacific region and one of the world’s largest seafood producers. Despite this, the fisheries sector contributed less than three percent to Indonesia’s GDP even though 77 percent of its geographical area is made up of ocean waters. Realizing the unexplored potential of the marine sector, the Indonesian government is focusing the country's attention on this sector as part of the country's goal to make Indonesia a global maritime axis.
As for the forestry sector, Indonesia is one of the world’s largest exporters of tropical timber products, ranging from plywood, pulp, and paper which are used to produce furniture and handicrafts. This subsector, however, is expected to grow slower in the future as Indonesia attempts to decrease its deforestation rates.
Challenges facing the Indonesian agricultural sector
Despite the significant size of Indonesia’s agriculture industry, some barriers to maximizing its potential still exist, such as poor technological advancement and supply chain challenges. These issues are further compounded by prolonged spells of bad weather, such as drought, leading to shortages of basic commodities such as rice, wheat, soybeans, and sugar.In recent years, Indonesian ‘agripreneurs’ and the government have been transforming the agricultural sector by establishing collectives and using modern farming methods. However, challenges such as increasing demand for food traceability and the impact of climate change are already taking a toll on Indonesia’s agriculture. To remain competitive, the country needs to accelerate the adoption of digital technologies in its agricultural practices. This could help shorten the long distribution chain from farmers to consumers, reduce its large carbon footprint, and enhance Indonesia’s position in the global agricultural market.
