Agriculture forms the economy’s backbone, but the sector has yet to realize its full potential
INVESTMENT IN HIGH-YIELD SEEDS AND IRRIGATION SYSTEMS HAS SEEN A SIGNIFICANT GROWTH IN OUTPUT AND AS THE GOVERNMENT PROGRESSES WITH ITS PLANTATION REHABILITATION PLANS PRODUCTION WILL RISE FURTHER

The agricultural sector is the cornerstone of Indonesian society, even if it plays second fiddle to the oil and natural gas industry in the national economy.
Nearly half of Indonesia’s entire labor force lives off the land. Farms and plantations produce a quarter of non-oil exports and account for 15 percent of national output.
Agricultural output has risen sharply in recent years following the adoption of high-yield seeds, investment in irrigation systems and the increasing use of pesticides and herbicides. There is little doubt that agriculture has huge potential, but that so far has only partly been realized.

TEA has been grown on plantations here since about 1860 and the country supplies a twelfth of world demand.

RUBBER (top) and cocoa are both important crops.

While Indonesia is the largest producer of coconuts in the world, there are hopes that it might also seize the lead in global palm oil production.
Industry analysts forecast that, in the next few years, Indonesia should overtake its rival Malaysia in the world palm oil production league, encouraged by the rapid growth of palm oil output in previous years. Indonesia has the added advantages of vast tracts of land that could be converted into plantations and a plentiful labor force.

The government has permitted the conversion of about 24 million acres into agricultural land, of which over 23 million acres are suitable for oil palm. Already 10.8 million acres have been released to plantation companies and over 1.5 million acres to smallholders who have taken permits to plant oil palm.
However, Malaysia is still the more efficient producer with an estimated total area of 8.4 million acres under oil palm cultivation and output of 11.8 million tons of crude palm oil in 2001. In comparison, Indonesia has about 8.84 million acres under oil palm cultivation, but produced only about 7.2 million tons of crude palm oil last.

Estimates are that Indonesia’s 2002 production will be over 9 million tons and with the government’s initiatives to rehabilitate plantations and increase yield efficiency, output is set to rise.
In the meantime, work continues on renovating other plantations to increase the output of key agricultural exports including natural rubber (in which Indonesia is also the world’s second biggest producer), coffee and tea. Other important crops include cassava, corn, sugar, fruit and vegetables, principally for local consumption.
Indonesia still has work to do if it is to make the most of its farming sector. But the promise for the future
undoubtedly exists.