the Factors Influencing Agriculture in Indonesia

Authors

  • Polly Mynary

Abstract

Indonesia has been one of the main places that has suffered tremendously from the global economic recession, and this has resulted in a decrease in agricultural development, which has led to an increase in food prices. While most countries around the world have been struggling to cope up with their increased population, there are few who are able to sustain a good and reliable agricultural industry. The following article aims to highlight some of the major factors that have contributed to the decline of the agricultural industry in Indonesia. Agriculture in Indonesia has been dominated by smallholder farmers, whose incomes are dependent on cash crop production. As indicated by the graph below, the average increase in the agricultural workforce and decline in agricultural labor are both very similar. However, the rural economy still dominates the farm labor segment with a roughly 50% share of the total labor force. The rise in tourism and other industries that have sprung up around the country has not helped the agricultural industry. There are also some problems related to poor and high quality soils, low irrigation infrastructure and the inability to effectively irrigate crops. This is something that affects both smallholders and big producers. On the whole, agricultural activities in Indonesia have been affected by the global economic crisis, especially the smallholder farms that have seen a sharp decline in their income. Most of these farms are located in the provinces of Java, Borneo, South Sumatra and East Kalimantan. Food and agricultural production have been affected by the global recession, but in a different way from the rural industry. The decline in agricultural production has also been reflected in the food basket of Indonesia, which has declined since 2020. This decline has also been reflected in the price of fruits and vegetables, which have declined sharply in comparison to what they were last year. The rise in inflation and currency depreciation has also had a negative impact on agricultural production and output. There are also issues related to the political situation in the country, which has resulted in a dramatic change in the economic slowdown. The government of President Susilo Bambang Yudhoyono has started to introduce more liberal policies in the economy, such as reducing tariffs, opening the market for trade and commerce, allowing more foreign direct investment and allowing more private companies to engage in agricultural production. These moves, however, have led to a further decline in agriculture production.

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Published

2020-11-21