Indonesia - Agriculture

About 45% of Indonesian workers are engaged in agriculture, which accounts for 17% of GDP in 2001. Some 31 million ha (76.6 million acres) are under cultivation, with 35% to 40% of the cultivated land devoted to the production of export crops. Some 60% of the country's cultivated land is in Java.

There are three main types of farming: smallholder farming (mostly rice), smallholder cash cropping, and about 1,800 large foreign-owned or privately owned estates, the latter two producing export crops. Small-scale farming is usually carried out on modest plots—those in Java average about 0.8–1 ha (2–2.5 acres)—often without benefit of modern tools and methods, good seed, or fertilizer. Although rice, vegetables, and fruit constitute the bulk of the small farmer's crops, about 20% of output is in cash crops for export, the chief of which is rubber. Of the estategrown crops, rubber, tobacco, sugar, palm oil, hard fiber, coffee, tea, cocoa, and cinchona are the most important. Dutch, United Kingdom, United States, French, and Belgian capital financed estate agriculture in colonial times, with the Dutch share being the largest. Management of Dutch interests was taken over by the Indonesian government in December 1957; in 1964, the 104 UK-operated plantations were confiscated without any compensation, and Indonesian managers were appointed. The following year, the US-operated plantations were expropriated, and all foreign plantations were placed under the control and supervision of the Indonesian government. In 1967, some of the estates seized in 1965, including the US-leased rubber plantations, were returned, but the majority were retained by the government.

Because the population is rapidly increasing, the government seeks to achieve food self-sufficiency through expansion of arable acreage, improved farm techniques (especially the use of fertilizers and improved seeds), extension of irrigation facilities, and expanded training for farmers. Production of rice, the staple food, has been gradually increasing, and production comes close to meeting domestic requirements. This increase has resulted less from extension of cultivated area through the government's resettlement policy than from expanded use of irrigation, fertilizers, and pesticides and cultivation of high-yielding hybrid rice, especially insect-resistant hybrids. It also reflects the success of the government's "mass guidance" program, which provides technical assistance, easy credit terms, and marketing support through a system of village cooperatives. Additional support was provided by the National Logistics Board, which is responsible for price regulation and the national rice-rationing programs. Due to the rapid growth of the industrial sector, the agricultural contribution to GDP is expected to decline to 11.8% by 2003.

Rice is the primary staple crop; production in 2001 totaled 50,461,000 tons. Other staple crops in 1999 included cassava (15,422,000 tons), corn (9,139,000 tons), and sweet potato (1,928,000 tons). Vegetable production in 2000 included 1,366,410 tons of cabbages, 772,818 tons of shallots, and 454,815 tons of mustard greens. Sugar is the largest commercial crop, with production reaching 26,000,000 tons in 1999. About 1,564,000 tons of rubber were produced in 1999, as compared with about 648,400 in 1964. Faced with the prospect of declining yields, the government began an extensive replanting and rehabilitation program in 1981. In 2001/02, Indonesia was the world's fourth largest producer of coffee (after Brazil, Colombia, and Viet Nam); some 369,600 tons of coffee were grown that year, as compared with 188,900 tons in 1972 and an annual average of 120,400 tons during 1960–65. Indonesia is the world's second-largest producer of palm oil (after Malaysia); 9.1 million tons were produced in 2001/02. Palm kernels (2.68 million tons in 2001/02) and copra (1.36 million tons in 2001/02) are also important export crops.