[56] Of the exports, 25% are arabica beans; the balance is robusta. halal certification) are significant and potentially stringent. Only during the Asian Financial Crisis in the late 1990s this share grew significantly because unemployment in both the industry and services sectors was absorbed by the agriculture sector (mostly informally).
Large plantations, either owned by state or private companies; This page was last edited on 21 June 2022, at 14:41. The government of Indonesia invests in irrigation infrastructure. Since 2007 the government has also started revitalization programs for smallholding farmers in order to raise production. [59], The deforestation in Indonesia is caused by logging industry, either legal or illegal, and in turn also contributed by the conversion of natural rainforest into agricultural lands, especially palm oil plantation. To design a more resilient policy framework for the period after the COVID-19 pandemic, measures implemented in response to the crisis, such as those expanding agricultural land and input subsidies, should be evaluated with respect to their impact on the livelihoods of those in need, and on the environment.
[48] Known throughout the world as the "Spice Islands", the Indonesian islands of Maluku contributed to the introduction of its native spices to the world. [51][52], Coconut plays an important role in Indonesian cuisine as well as its economy. The total budget on insurance amounted to IDR107.1billion (USD7.35million) in 2020. The country provides subsidies for input use, particularly fertilisers and seeds. Application of fertilisers must adapt to local soil and production conditions to be effective and avoid negative environmental impacts. [38], In addition to smaller productions of other agricultural products, such as leeks (573 thousand tons), eggplant (551 thousand tons), cucumber (433 thousand tons), ginger (207 thousand tons), cashew nuts (136 thousand tons, 10th largest producer in the world), cloves (123 thousand tons), areca nut (128 thousand tonnes), kapok fruit (196 thousand tons), tea (141 thousand tons), tobacco (181 thousand tons, 6th largest producer in the world) etc. Indonesia's geographic location is considered as ideal for coffee plantations. As part of policy responses to COVID-19, Indonesia launched a programme to increase production and food reserves by turning potential farmlands in Central Kalimantan to production under a government initiative in the so-called food estates. Administrative requirements on agro-food imports related to food safety, quarantine, product standards and labelling have proliferated in Indonesia. International Trade Administration To reduce these costs, the scientific basis of these requirements needs to be clarified, and transparency and consistency in their implementation improved. Indonesias producer support estimate was mostly positive over the past 30years, except during the financial crisis in 1998 and the food crisis in 2008. Import requirements imposed for sanitary, phytosanitary and religious/cultural reasons (i.e. USDA GAIN (2014). The ongoing reform of the food assistance programmes gradually shifting from the Rastra physical distribution system to the BPNT electronic food voucher system is an important step to improve their effectiveness. A similar programme was launched on cattle development, named the 1000Cattle Villages in five provinces as a pilot project (Lampung, West Nusa Tenggara, East Nusa Tenggara, South Sulawesi and East Java). Establishment of sugarcane, coffee, tea, tobacco, quinine, rubber and palm oil plantations was also expanded in the colony. These consecutive programmes allowed the Food Logistics Agency BULOG to distribute 10kg of rice per poor family per month. Grant for machineries to targeted farmers groups. 1401 Constitution Ave NW [19] Ministry of Agriculture (Kementerian Pertanian) (2020), Rekapitulasi Anggaran dan Realisasi Pecegahan dan Penaggulangan Covid-19 Lingkup Kementerian Pertanian Tahun Anggaran 2020 (Summary of budget for Covid-19 response programme in 2020), Ministry of Agriculture, Jakarta. Source: OECD (2021), Producer and Consumer Support Estimates, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.
The reduction in the share of agriculture in employment has been proportionally much larger, declining from 45% in 2000 to 29% in 2019, with a significant increase in the average production per employed person in the sector. Indonesias producer support to agriculture increased significantly in the 2000s, from 7.5% of gross farm receipts in 2000-02 to 21.3% in 2010. In-depth columns and analyses of Indonesia's sectors, companies and commodities, Updates on political, economic and social matters, For investment ideas and how to realize them, Trade Balance of Indonesia: Strong Rebound in Exports & Imports in June 2022, Measuring the Health of the Indonesian Economy; Challenging Yet Stable Conditions in Q2-2022, New Report Out: Indonesia Investments Releases June 2022 Edition, Developing an Electric Vehicle Ecosystem in Indonesia; Integrating the Upstream & Downstream Sectors, Trade Balance of Indonesia: Impact of Palm Oil Export Ban Felt Heavily in May 2022, Copyright Van der Schaar Investments B.V. Delft The Netherlands. [6] Sudaryanto,T. (2018), An Overview of Indonesias Agricultural Policies in 2018. Soybean consumption in Indonesia is predominantly for human food, with most imported soybeans going to tempeh and tofu production. Converting these subsidies into less coupled payments per unit of land would make the support more efficient and be in line with those implemented in other countries, including the Peoples Republic of China (hereafter China). [12] Tirto (2020), Juta Jiwa (Ministry of Social Affairs) Targeted that Recipient of Basic Necessity Programme Will Reach 20 Millions Household, https://tirto.id-men. The large plantations tend to focus on commodities which are important export products (palm oil and rubber), while the smallhold farmers focus on rice, soybeans, corn, fruits and vegetables. For capture of wild fish (both inland and marine), the production trend was steady in 20112015, while there was a steep increase in the production from aquaculture during the same period.[41]. As one of the worlds largest cotton importers, Indonesia imported more than 163,188 tons of cotton from the United States in 2020. [2], At present, Indonesia is also the world's largest producer of palm oil,[4] cloves,[5] and cinnamon,[6] the 2nd largest producer of nutmeg[7] natural rubber[8][9] cassava[10] vanilla[11] and coconut oil,[12] the 3rd largest producer of rice[13] and cocoa,[14] the 4th largest producer of coffee. [3], In 1942, Dutch East Indies fell under the control of the Japanese Empire. Sources: USDA Economic Research Service,Agricultural Productivity database; OECD statistical databases; FAO database and national data. During the Suharto era, the government launched the transmigration program that relocated landless farmers from the overpopulated Java to the less populated Sumatra, Kalimantan, Sulawesi and Papua, thus expanded agricultural farms in the outer islands of the territory.[36]. The country possesses vast and abundant arable fertile soils. The regulation mandates that all growers, including both large plantations and smallholders, be certified before 2025 (GAIN ID0016, 2020[13]). The objective of this programme is to strengthen national food reserves. In 2020, the MoA launched a strategic programme to achieve a self-reliant and modern agriculture. The programme will be expanded to cover 165000hectares by the year 2024. The mountainous region around Malang in East Java is the production center for apple and dragon fruit, while those around Bandung in West Java are the production centers for strawberry, honeydew and mushroom.
However, private companies can import specialty rice such as jasmine rice and basmati rice (USDA FAS, 2018[4]). Many food processors source their raw materials from overseas such as wheat, milk powder, chipping potatoes, onion/ garlic powder, cheese, raisins, and corn starch. Foreign Direct Investment Attraction Events, Services for U.S. Companies New to Exporting, Services for U.S. Companies Currently Exporting, Leading Sectors for US Exports & Investments, Information and Telecommunications Technology, Financial Services (Financial Technology), Licensing Requirements for Professional Services, USDA Indonesia Foreign Agricultural Service GAIN Reports, USDA Indonesia Food and Agricultural Import Regulations and Standards Country Report, USDA Indonesia Food Processing Ingredients Report, USDA Indonesia Food and Agricultural Import Regulations and Standards Report, USDA Foreign Agricultural Service https://www.fas.usda.gov/. To raise the purchasing power of consumers, the government also implemented additional social safety net programmes. Nevertheless, for the majority of Indonesian households, farming and plantation remains as a vital income generator. [17], Indonesia is the fifth largest tobacco producer in the world, and also the fifth largest tobacco market in the world, and in 2008 over 165 billion cigarettes were sold in the country. However, surprisingly nutmeg, mace and cloves are seldom used in Indonesian cuisine. [1] USDA FAS (2019), Food and Agricultural Import Regulations and Standards. Combined with uneven enforcement and lack of transparency from changing rules, the requirements add to trade costs. Share sensitive information only on official, secure websites.
They are often implemented in a non-transparent manner and add to the cost of importing. On 18May 2020, the government announced the allocation of a USD186million subsidy to maintain its B30 biodiesel mandate in 2020 and 2021. Indofood, Mayora Indah, Garuda Food Group, Wings Group are a few of the largest food processors in Indonesia, producing a variety of products such as snack foods, noodles, dairy, and beverages. In 2020 Indonesia imported $1.2 billion of fresh fruits including pears, apples, grapes and oranges/ mandarins, which together accounted for 90 percent of total fresh fruit import volume. The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions. Indonesia could improve the contribution of agriculture, forestry and land use to climate change mitigation by implementing targeted measures, such as those identified in the National Plan to reduce greenhouse gas (GHG) emissions in management of agricultural land without burning and reforestation.
Indonesia has a large food assistance programme (BPNT) to support poor consumers based on electronic vouchers. In line with the Ministry of Trade regulation on the Import and Export of Animals and Animal Products issued in September 2011, these imports can only be carried out if the domestic production and supply are not sufficient to meet consumer demand at an affordable price. Indonesian agricultural policy focuses on self-sufficiency and corresponding trade measures as a tool to achieve food self-reliance. [57], Indonesia is the world sixth largest tea producer. Tariffs fell significantly over the period. Before the beginning of the planting season, the Ministry of Agriculture (MoA) issues a decree on the estimated demand for different types of fertiliser by provinces, along with the reference retail price of fertilisers. But although in absolute numbers the agricultural workforce keeps growing, its relative share of the total Indonesian workforce has declined significantly from 55 percent in the 1980s to 45 percent in the 1990s and currently to 41 percent. [40], In 2015, the total production of seafood reached about 22.31 million metric tons, valued at around 18.10 billion US dollars.
The Palm Oil Fund management board manages the funds from the levy. RCEP combines and deepens a number of existing bilateral and regional agreements, and once in force, it will be the largest free trade agreement in the world covering around 30% of both the global population and its GDP. [22] AMIS (2020), AMIS Marke Monitoring No 80 July. Coffee in Indonesia began with its colonial history, and has played an important part in the growth of the country. Other payments include Payments based on non-current A/An/R/I (production required) and Miscellaneous payments. [16] Rafani,I. Currently, Indonesia's rubber production is the world's second-largest after Thailand. Trade liberalisation started only in the 1990s with the signature of agreements that created the WTO and the ASEAN Free Trade Area (AFTA). The latest tariff schedule was released in 2017. The instability of food prices since 2008 has led to a renewed emphasis on food security. Tea production in Indonesia began in the 18th century, introduced by the Dutch as cash crop. Food Preparation, Processing and Foodservice Sectors: Indonesia imports a variety of food preparation products such as baking inputs (corn starch, malt extract, baking powders, yeasts etc. Indonesias economy was relatively closed to trade for almost three decades from the 1960s to the 1980s. The programme is expected to cover 165000hectares by 2024. [10] Ministry of Agriculture (Kementerian Pertanian) (2020), Grand Design Pengembangan Kawasan Food Estate Berbasis Korporasi Petani (Grand Design of Food Estate Development Area Based on Farmers Corporation), Bureau of Planning (Biro Perencanaan). Indonesia Coffee Annual 2014, Global Agricultural Information Network (GAIN), USDA Foreign Agricultural Service. Import monopolies, licensing requirements and export restrictions on agricultural products were removed in 1997-98. On the other, import tariffs result in positive support to other commodities. NPC: Nominal Protection Coefficient. Additional budget funds were allocated to income tax exemption to both government and private companies that carry out export, import, and re-import trade activities in specific sectors. Majority of rubber estates in Indonesia are smallholder farmers, which retain for about 85 percent. 24/2020 on Reference Price). Agriculture in Indonesia started as a means to grow and provide food. The objective is to support the national biodiesel production programme with lower domestic prices and to absorb excess supplies of palm oil. At the national level, the government implemented a stimulus package in response to COVID-19, focused on maintaining peoples purchasing power and facilitating export and imports. Haze occurs annually during the dry season and is largely caused by illegal agricultural fires due to slash-and-burn practices in Indonesia, especially in the provinces of South Sumatra and Riau on Indonesia's Sumatra island, and Kalimantan on Indonesian Borneo.
The government increased minimum purchase prices for paddy rice by 14% in 2020 after having kept them constant in nominal terms since 2015. Indonesia restricts the importation of strategic commodities (those associated with self-sufficiency targets: rice, maize, soybeans, sugar and beef). Agricultural policy measures focused on food availability from domestic production. Those spices from mainland Asia were introduced early, in ancient times, thus they became integral ingredients in Indonesian cuisine. [2], Located in the tropical region, Indonesia enjoys abundant rain and sunshine most of the time, which are important elements for agricultural products to thrive. Indonesia responded to the COVID-19 pandemic by expanding its food assistance programmes. This fact implied that the government and large private estates took a minor role in Indonesian rubber industry. As a vital necessity for Indonesian households, the government is responsible to regulate rice price and availability through Indonesian Bureau of Logistics (Bulog), which ensure its continuous supply and price stability. [37] Currently, Indonesia is the world's largest producer of palm oil and the leading producer of coffee, rubber and cocoa. VOC further established sugar plantations in Java. [46] Compared to neighboring countries with a well-developed horticultural sector like Thailand, Indonesia has much to improve. Import monopolies, licensing requirements and export restrictions on agricultural products ended in 1997-98.
When the retail price exceeds the ceiling, BULOG also releases rice from stocks to the market. Large parts of tea produced in Indonesian mainly is black tea, although small amounts of green tea are also produced. [55], Indonesia produced an estimated 540,000 metric tons of coffee in 2014. These cover 40 million hectares of degraded forest areas that have turned into grasslands after being abandoned by logging concessionaires. The Dutch introduced numbers of cash crops and commodities to create and establish an economic engine in its colony. The Portuguese, through Spanish intermediaries, introduced the New World's products such as chili pepper, maize, papaya, peanuts, potato, tomato, rubber and tobacco into the archipelago's soil.
[15] the 5th largest tobacco producer. [15] AMIS (2020), AMIS Market Monitoring No 79 June. The Food Law of 2012 shapes Indonesias current agricultural policy and set of core objectives. [9] Ministry of Agriculture (Kementerian Pertanian) (2021), Opening the 2021 Horticulture Development, Minister of Agriculture : This Year Must be Much Better, Ministry of Agriculture, Jakarta, Indonesia. These create large price gaps between domestic and international markets for imported products such as maize, poultry and rice. It contains provisions restricting staple food exports and imports such as state food export can only be implemented after fulfilling National Food Reserve and staple food consumption necessity and food imports can only be implemented if domestic food production is not sufficient or cannot be produced domestically (Articles 34 and 36). Agriculture is one of the key sectors within the Indonesian economy. The Law confirms the principles of the Strategic Plan of the Ministry of Agriculture 2020-24: achieving self-sufficiency in the production of selected staple-food commodities (rice, maize, soybeans, sugar and beef) to assure food security; ensuring food prices are affordable for consumers across the archipelago; diversifying production and consumption away from carbohydrates (rice and wheat) towards animal-based products, and fruits and vegetables (particularly root vegetables); raising the competitiveness of agricultural production and value-added processing; increasing the availability of raw materials for bio-industry and bioenergy; and improving the welfare of farmers through higher incomes as a way to reduce the level of rural poverty (OECD, 2012[2]). On 5July 2020, the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), signed in 2019, entered into force. The weight of agriculture in the economy has been falling in the last two decades, but the sector still accounts for almost 13% of GDP. Please select the WEB or READ option instead (if available). It assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development. As one of the world's major agricultural nation, the country offers wide diversity of tropical products and important agricultural commodities; which include palm oil, natural rubber, cocoa, coffee, tea, cassava, rice and tropical spices. Note: The producer price change and the border price change are not calculated when the negative price gap occurs at the commodity level for the current or previous year. In Bali, the traditional subak irrigation system was created to ensure that there is adequate water supply for rice paddies. However, the pandemic has threatened food security, in particular downstream in the food supply chain due to limited mobility of both people and goods.
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