Agriculture in Indonesia
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Agriculture in Indonesia is one of the key sectors of Indonesian economy. Although the share of agriculture sector contribution to the national gross domestic product has declined significantly in the last half century, today it still provides income for the majority of Indonesian households. In 2013, the agricultural sector contributed to 14.43 percent of national GDP, a slight decline compared to a decade earlier (2003) which reached 15.19 percent. In 2012, this sector provides jobs for around 49 million Indonesians, which represents 41 percent of the total labour force in the country.
Generally, the agricultural sector of Indonesia comprises two types which corresponds scale:
- Large plantations either owned by state or private companies
- Smallholder production modes, mostly traditional agricultural households.
The large plantations tend to focus on export commodities; such as palm oil and rubber, while the small scale farmers focus on horticultural commodities to supply the food consumption of local and regional population, such as rice, soybeans, corn, fruits and vegetables.
Located in the tropical region, Indonesia enjoys abundant rain and sunshine most of the time, which are important elements for agriculture. Most of global agricultural commodities thrive in Indonesia. The country possesses vast and abundant arable fertile soils. Indonesia is a world's major key producer of a wide variety of agricultural tropical products. Indonesia's important agricultural commodities include palm oil, natural rubber, cocoa, coffee, tea, cassava, rice and tropical spices.
Currently Indonesia is the world's largest producer of palm oil, cloves, and cinnamon, the 2nd largest producer of nutmeg natural rubber cassava vanilla and coconut oil, the 3rd largest producer of rice and cocoa, the 4th largest producer of coffee. the 5th largest tobacco producer. and the 6th largest tea producer.
Agricultural pursuits in Indonesian history spanned for some millennia, with some traces still observable in some parts in the archipelago. The hunter-gatherer society still exist in interior Kalimantan (Indonesian Borneo) and Papua (Indonesian New Guinea) such as Kombai people, while sophisticated rice cultivating community, the remnant of Hindu-Buddhist polity still observable in Bali through their subak irrigation system. Much of cash crops commodities were introduced during colonial times.
Agriculture in Indonesia started as a means to grow and provide food. Rice, coconut, sugar palm, taro, tubers, shallots and tropical fruits were among the earliest produce being cultivated in the archipelago. Evidence of wild rice cultivation on the island of Sulawesi dates from 3000 BCE. Rice has been a staple food for Indonesians for millennia, and it holds the central place in Indonesian culture and cuisine. Rice growing shapes the landscape, is sold at markets, and is served in most meals.
Javanese stone inscriptions dated from 8th century describes the king levied tax in rice, while some panels of the bas-reliefs on temples walls, such as at Borobudur and Prambanan, describe agricultural activities. Next to rice, the bas-reliefs of Borobudur describe other indigenous agricultural products as well, such as banana (musa paradisiaca), coconut (Cocos nucifera), sugarcane (Saccharum officinarum'), Java apple (Syzygium samarangense), jackfruit (Artocarpus heterophyllus), durian (Durio zibethinus) and mangosteen (Mangifera indica).
The importance of rice in Indonesian culture is demonstrated through the reverence of Dewi Sri, the rice goddess of ancient Java and Bali. Traditionally the agricultural cycles linked to rice cultivation were celebrated through rituals, such as Sundanese Seren Taun rice harvest festival. In Bali the traditional subak irrigation management was created to ensure the water supplies for rice paddies, managed by priests and created around "water temples". Indonesian vernacular architecture also recognizes numbers of lumbung or rice barns styles, such as Sundanese leuit, Sasak style rice barn, Toraja's tongkonan shape, to Minangkabau's rangkiang.
Local kingdoms in Indonesia were among the earliest polities to participate in global spice trade. The ancient maritime empires of Srivijaya (7th to 11th century) and Majapahit (13th to 15th century) for example, were actively involved in spice trade with China, India and the Middle East. Ports of Sunda and Banten were important centers of pepper trade back in 14th to 17th century.
Certain endemic Indonesian spices such as nutmeg and cloves were highly sought in the West, and prompted the European Age of Exploration. Nutmeg is indigenous to the Banda Islands. Portuguese was the earliest European that established their presence in the archipelago by the early 16th century. Portuguese, through Spanish intermediary, has introduced the New World's produces into archipelago's soil, such as chili pepper, maize, papaya, peanuts, potato, tomato, rubber and tobacco, although effective plantations would begin in later period.
The surge of global spice trade was the factor that led European traders to reach Indonesian archipelago; in search of valuable spices' source directly, and to cut through middlemen in Asia (Arabs and Indian merchants) and Europe (Italian merchants). By the early 17th century, Dutch East India Company (VOC) began to established its influence in the archipelago, by building trading offices, warehouses and forts in Amboina and Batavia. By then, VOC monopolized spice commodity trade, especially pepper and nutmeg, and actively pursuing it shares in intra-Asian trades with India and China. VOC further established sugar plantation in Java.
By the turn of the 19th century, VOC was declared bankrupt and nationalized by the Dutch as Dutch East Indies. This event officially marked the Dutch colonial period in the archipelago. Regarding the lucrative cash crop exploitation as a source of their fund, in the mid-19th century, the Dutch East Indies government implemented cultuurstelsel which required a portion of agricultural production lands to be devoted to export crops. The cultivation system was enforced in Java and other parts of Indonesia by the Dutch colonial government between 1830 and 1870. Indonesian historians refer to it as Tanam Paksa ("Enforcement Planting"). The Dutch introduced numbers of cash crops and commodities to generate economic engine in its colony; subsequently sugarcane, coffee, tea, tobacco, quinine, rubber and palm oil plantations began to expand in the colony. During Dutch East Indies era, the agriculture sector of the colony was regulated by Departement van Landbouw (1905), Departement van Landbouw, Nijverheid en Handel (1911) and Departement van Ekonomische Zaken (1934).
In 1942, Dutch East Indies were fell under the control of Japanese Empire. In this Japanese occupation period, the agriculture sector was overseen by Gunseikanbu Sangyobu. During World War II (1942—1945), the Indies experienced hardships which includes agricultural scarcity and famine. Rice yields and plantation commodities were controlled by Japanese empire military authority for supporting their war efforts. The plantation business, which was the key economy sector in the Indies, were more or less shut down during the Pacific War and the ensuing Indonesian war of independence (1945—1949). All efforts in agricultural sector was focused to fulfill basic needs of food (rice) and clothing (cotton). Imperial Japanese authority did try to increase rice and cotton production in the occupied Indies, and to reach this they mobilise labour in such large scale. However, availability of those essential commodities plummeted, resulting in famine and clothing scarcity.
Indonesian Republic declared its independence on 17 August 1945. Indonesia become the member of United Nation's Food and Agriculture Organization (FAO) in 1948. The partnership was strengthened with the opening of a FAO's country office in 1978. The agriculture sector of the republic has been overviewed and regulated by Indonesian Ministry of Agriculture. As Indonesian Republic nationalized most of colonial economic infrastructures, institutions and businesses, Indonesia pretty much inherited the agricultural system of its predecessor, the Dutch East Indies. The republic tried to develop the post-war agricultural sector. The agriculture development and expansion grew significantly in the 1960s to 1980s. During Suharto era, the government launched transmigration program which relocated landless farmers from overpopulated Java to less populated Sumatra, Kalimantan, Sulawesi and Papua, thus expanded agricultural farms in outer islands.
The most significant growth is the expansion of palm oil plantation, which become the new form of transmigration program. Actually, now Indonesia is the largest producer of palm oil in the world, and the leading producer of coffee, rubber and cocoa globally. Furthermore, Indonesia still has vast tracts of idle lands, potential to be developed into farmland. This includes 40 million hectares of degraded forest areas that have turned into grasslands after being abandoned by logging concessionaires. Agricultural commodities are known for its economic resilience, they are among the first to recover from the impacts of the global financial meltdown. With large number of its population still working in agriculture, Indonesia has great potential and opportunity to develop its agricultural sector and attract foreign investments.
Rice was the staple food of all classes in Indonesian diet, as typical Indonesian meal consists of numbers of richly flavoured side dishes, meat or poultry and vegetables, surrounding a pile of steamed rice. Indonesia is the third largest rice producer in the world after China and India. However, because of Indonesia's large populations, almost all of Indonesia's rice production are well absorbed and consumed internally. To ensure food security, the government fill the gap between the supply and demand through importation from neighboring countries; especially rice imports from Thailand, Vietnam and Cambodia.
Horticulture, which includes fruits and vegetables production, holds an important role in local Indonesian economy, food security, diet and cuisine. Indonesia possess large variety of horticultural products, with native fruits includes durian, mangosteen, rambutan, salak, banana, jackfruit, mango, kedondong, jambu air, buni, jamblang and kecapi. Majority of local needs of fruits and vegetables are supplied by local traditional farmers. The produces' prices are highly dependent on the seasonal availability and the proximity to production centers, due to transportation and cargo infrastructure restrictions. As the result, the prices of horticulture produces vary greatly throughout Indonesia; the prices might be cheaper in Bandung and Bukittinggi which are closer to horticulture farms, but significantly more expensive in Pekanbaru and Balikpapan which are located far from mountainous production centres. Recently, owed to Indonesian variety of topography, non-tropical horticultural products; such as apple, strawberry, honeydew, grapes and dragon fruit are grown in cooler mountainous region in Indonesia. Mountainous regions around Malang in East Java are known as the production center of apple and dragonfruit, while those around Bandung in West Java are known as strawberry, honeydew and mushroom production center.
As the world's fourth largest population, Indonesia possess a large market for horticultural products. Nevertheless, the horticultural sector in Indonesia is deemed as underperforming, which created the need of imported fruits and vegetables. It is often found that the locally grown horticultural produces have inferior quality compared to imported ones. Indonesian horticulture farmers face a problematic situation; the imported horticultural products are often cheaper than the locally produced horticultural products. Compared to neighboring countries with well-developed horticultural sector such as Thailand, Indonesia has much to improve. Currently, Indonesia imported much of its horticultural needs from Thailand (especially durian, carrot and chili pepper), China (especially garlic, orange and pear) and United States (especially soybean and apple). To protect local farmers, Indonesia applied protectionist policy on import settings for horticultural products, as well as the restriction of port of entry.
Spice is an essential element in Indonesian cuisine. In Indonesian, spice is called rempah, while the mixture of spices is called bumbu, they are chopped finely or ground into paste using traditional stone mortar and pestle, and spread over vegetables, meat, poultry, fish and seafood to add aroma and taste. Known throughout the world as the "Spice Islands", the Indonesian islands of Maluku contributed to the introduction of its native spices to the world. Spices such as pala (nutmeg/mace), cengkeh (clove), daun pandan (Pandan leaves), kluwek (Pangium edule) and laos (galangal) are native to Indonesia. However, surprisingly nutmeg, mace and cloves are seldomly used in Indonesian cuisine.
It is likely that lada hitam (black pepper), kunyit (turmeric), sereh (lemongrass), salam koja (curry leaf), bawang merah (shallot), kayu manis (cinnamon), kemiri (candlenut), ketumbar (coriander), and asam jawa (tamarind) were introduced from India or mainland Southeast Asia, while jahe (ginger), daun bawang (scallions) and bawang putih (garlic) were introduced from China. Those spices from mainland Asia were introduced early, in ancient times, thus they became integral ingredients in Indonesian cuisine. While the New World spices such as chili pepper and tomato were introduced by Portuguese and Spanish traders during the age of exploration in the 16th century.
Indonesia is both the world's biggest producer and consumer of the commodity, providing about half the world supply. Oil palm plantations stretch across 6 million hectares. Palm oil is the essential ingredients to produces cooking oil, as well as other food and cosmetics products. The country also aimed to be the largest palm-based biofuel production center.
Coconut plays an important role in Indonesian cuisine as well as its economy. Coconut milk is an important common ingredients in numbers of Indonesian favourites, including rendang and soto. According to figures published in December 2009 by the Food and Agriculture Organization of the United Nations, it is the world's second largest producer of coconuts, producing 15,319,500 tonnes in 2009.
Indonesian rubber industry take its root in colonial Dutch East Indies; in the early 20th century the rubber plantation in the colony was booming, largely owed to the advent of natural rubber tire industry to supply the growing automotive industry in the United States and Europe. Currently, Indonesia's rubber production is the world's second-largest after Thailand. Natural rubber is an important export commodity that earn foreign exchange, with increasing production trend. In fact, ASEAN nations are among the largest natural rubber producers; the combined rubber yield of three ASEAN members — Thailand, Indonesia and Malaysia — accounts for nearly 66 percent of global total rubber production. However, compared to neighbouring countries, Indonesia's productivity level is lower (1,080 kg/ha), compared to Thailand (1,800 kg/ha), Vietnam (1,720 kg/ha) and Malaysia (1,510 kg/ha). Smallholder farmers in Indonesia retain for about 85 percent of total rubber estates, which suggests the minor role of government and large private estates in Indonesian rubber industry. Another problem is the lack of rubber processing facilities and manufacturing industry. In Indonesia, about half of the natural rubber that is absorbed internally goes to the tire manufacturing industry, followed by rubber gloves, rubber thread, footwear, retread tires, medical gloves, rubber carpets and various rubber tools.
In 2014, Indonesia was the fourth largest producer of coffee. Coffee in Indonesia began with its colonial history, and has played an important part in the growth of the country. Indonesia's geographic location is considered as ideal for coffee plantations. It is located near the equator and with numerous mountainous regions across the islands which creates suitable micro-climates for the growth and production of coffee.
Indonesia produced an estimated 540,000 metric tons of coffee in 2014. Of this total, estimated 154,800 tons was required for domestic consumption in the 2013–2014 financial year. Of the exports, 25% are arabica beans; the balance is robusta.
Indonesia is the world sixth largest tea producer. Tea production in Indonesia began in the 18th century, introduced by the Dutch as cash crop. Indonesia produced 150,100 tonnes of tea in 2013. However, 65% of that was exported from the country, which suggests Indonesians relatively low tea consumption. Tea production in Indonesian focused mainly on black tea, although small amounts of green are also produced. Moreover, many Indonesian tea varieties are not well known globally, since much of the Indonesian tea is used in blends; mixed with other teas.
As agricultural pursuits altered the natural landscapes; from rainforest, peat lands and swamps into arable lands, certainly it poses natural and environmental consequences. Environmental problems such as deforestation and forest and plantation fires, caused by forestry and agricultural sectors in Indonesia, continues to be a persisting problem that need to be addressed and solved.
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. Clearing rainforests for oil palm plantations has destroyed critical habitat for endangered species like rhinos, elephants, tigers and orangutans, which have all been pushed to the verge of extinction. This practice has raised international scrutiny on palm oil industry in Indonesia, especially from World Wide Fund for Nature, and raised the demand on sustainable palm oil production and certification.
Forest and plantation fires
Indonesian palm oil plantations' poor practice and poor environmental responsibility, has led to massive haze problem annually. Since 1997 Indonesia has been struggling to contain forest fires, especially on the islands of Sumatra and Kalimantan. 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 haze that occurred in 1997 was one of the most severe; dense hazes occurred again in 2005, 2006, 2009, 2013, and the worst was in 2015, killing dozens of Indonesians as a result of respiratory illnesses and road accidents due to poor visibility.
- Rice production in Indonesia
- Palm oil production in Indonesia
- Coconut production in Indonesia
- Coffee production in Indonesia
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