AGRICULTURE AND ECONOMY OF INDONESIA

Introduction to Agriculture in Indonesia

Indonesia is a country with a very good agricultural condition. With such a fertile land, it is possible for us to plant and grow almost all kinds of fruits, vegetables, and other plants. That’s why Indonesia is well known as an agrarian nation, a country that highly depends on agriculture as its primary means for support and sustenance. The society in Indonesia also acknowledges other means of livelihood and work habits, but stresses the importance of agriculture and farming.

            As an agrarian nation, the agriculture sector plays an important role in ensuring the life of the nation’s society, and even the nation itself. Most of the nation’s income comes from this sector. Also, there are so many farmers in Indonesia. To make it clearer, agriculture sector in Indonesia has a role in:

·       - providing job opportunity for the majority of labor force

·       - producing foods for nation

·       - raw material producer for industrial sector

·        -strengthening food security and rural development

Agriculture sector plays even more important role when Indonesia is in the middle of a crisis. Soekarno stated that agriculture is the life and death of Indonesia.

            One of the most valuable agriculture commodity in Indonesia is rice. Most of land in Indonesia is covered by rice fields. If we go to rural areas in this nation, we can easily find rice fields, with farmers working on the fields. The total area of rice field in Indonesia is about 7,8 hectares, including irrigated, rain fed, tidal, and deep water. Rice production stock dominantly supported by irrigated rice field (60,3%) and rain fed rice field (26,5%) (2006). Based on the statistics, 41% of rice field are located in Java and the other 59% are located outside Java (2006). Beside rice, there are also other valuables commodities such as corn, coconut, peanut, green bean, cinnamon, etc.

The Strength and Weakness

            Looking at the land condition in Indonesia, it is totally a great opportunity to maximize its income from agriculture sector. With good treatment and development, there are no doubts that Indonesia will be able to maximize its agriculture sector at the highest level. Indonesia has around 47,6 million hectares in cultivated surface area and 4,5 million hectares in irrigated surface area. The tropical climate that Indonesia has ensures crops to be grown all year round. And also, it is possible to grow almost all kinds of crops in Indonesia.

There have been so many contributions given by agriculture sector for this nation. For example, Indonesia achieved self-sufficiency in rice production by the mid-1980s - that was during the governance of the 2^nd President of Indonesia, Soeharto. He focused the nation’s development to agriculture sector. He’s the one who made the ‘food revolution’ in Indonesia, so that during his era Indonesia was able to achieve self-sufficiency in rice production. Because of this achievement, Soeharto was able to increase the life standard of the society and save Indonesia from economical crisis. Because of the big effort, traditionally a rice importing nation, Indonesia may export as many as 2 million tons of rice in 2009, the most in at least 50 years. Only a year removed from importing 800,000 tons of rice in order to meet consumption, Indonesia is on the pace to have the large surplus ever.

            Another contributor beside rice is coconut. Coconut is one of many commodities which is a great contributor for the nation’s income that can be relied on. We can see this from the export rate of coconut which reaches the number of US$11,61 billion, increased 17,75% or US$2,5 million from last year’s rate. Indonesia is one of the biggest coconut-producing countries in the world. Indonesia has a total coconut area of 8.04 million hectares with 19,76 million tons production of CPO (crude palm oil) in 2010.

           

From the facts listed above, we can conclude that agriculture sector is a great source of income for Indonesia. Agriculture sector is the third biggest source of income for Indonesia, which accounts 16.5% of Indonesia’s income/GDP (2010). The largest account is from industry sector (46.4%) followed by services (37.1%). However, since 2010, the agriculture sector has employed more people (38.3% of labor force) than industry sector (12.8% of labor force). And agriculture, however, had been the country’s largest employer for centuries. So, there is a big chance for the government to improve this sector to get more income.

Still, there are also some weaknesses regarding to the agriculture sector in Indonesia. The weaknesses are much more focused to the development itself.  The development of agriculture sector in the past had some weaknesses such as only focused on farming, low support of macro policies, and centralistic approach. Because of that, the agriculture business (especially farming) nowadays are dominated by businesses with:

• low scale 
•  low-to-limited capital 
•  simple technology
•   highly influenced by season
• local market area
• generally use family workers
• conversion from farming land to non-farming land etc.

Not only that, there are also other problems. In Indonesia, it’s a fact that the government don’t care too much about farmers. We can see it from these things:

• abandoned farm and village infrastructures
• government don’t care about urbanization
• low life standard in village
•   increased price of fertilizer, but decreased selling price for commodities
•   the importing policy of agriculture products, without making any efforts to increase the amount and quality of the products
• farmers have low knowledge about farming technologies  and many other problems that can’t be listed all

Looking at this situation, there are a lot things to do, to ‘heal’ the agriculture sector in Indonesia. Government should have given more care/treatments for agriculture workers, especially farmers. Government should look at Vietnam and Thailand. The government on both countries really takes serious actions in order to improve their agriculture sector. They make policies that support the local farmers. Because of that, both countries are now two of biggest rice exporters in the world. While Indonesia, in the other hand, becomes the biggest importer of rice in the world (14% of rice traded in world market), even though Indonesia is the third biggest producer of rice in the world (54 million metric tons, 2005).

Also, the government should make policies that really support farmers and other agriculture sector workers, such as lowering the amount of agriculture product imports, intensifying agriculture sector improvements and developments, subsidizing the price of fertilizers, give counseling and training for farmers and other agriculture sector workers, give incentives to boost productivity of farmers, etc. The government itself should interact actively and often with farmers to stimulate the paradigm and mentality if farmers to become ‘superior farmers’.

If the government is not reliable anymore, farmers should go on their own. They better do self-government actions to free themselves from government dependency, whatever the action is. For that, they need help from the experts, whether they are food and plant experts, marketing experts, management experts, or other related experts, that want to work voluntarily to save this country, whether they work individually or in an organization, whether they are from Indonesia or other countries. We cannot let this country destroyed because a handful of people in the government.

Sources

·        http://tepekur.blogspot.com/2012/03/selamatkan-industri-pangan-indonesia.html

·        http://internationalbusiness.wikia.com/wiki/Agriculture_as_a_Strength

·        http://en.wikipedia.org/wiki/Indonesia

·        http://en.wikipedia.org/wiki/List_of_largest_producing_countries_of_agricultural_commodities

·        http://en.wikipedia.org/wiki/Suharto

·        http://paskomnas.com/id/berita/Kondisi-Pertanian-Indonesia-saat-ini-Berdasarkan-Pandangan-Mahasiswa-Pertanian-Indonesia.php

·        http://www.asiaecon.org/special_articles/read_sp/12048

·        http://www.studymode.com/essays/Role-Agriculture-Indonesia-Economic-Development-170736.html

Nama   :           Bona Doni Gideon

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