Agricultural Sector of Indonesia And Its Role on Economy
Agricultural Sector of Indonesia And Its Role on Economy
With its vast and abundant fertile soils Indonesia is a major global key producer of a wide variety of agricultural tropical products, and although agriculture's share of the country's gross domestic product (GDP) has declined markedly during the last five decades, it still provides income for the majority of Indonesian households today. In 2012 this sector employed around 49 million Indonesian individuals, which represents 41 percent of the total Indonesian labor force. 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. 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).
Between the mid-1960s and mid-1980s the percentage of Indonesian land area that was used for agriculture stayed constant at around 21 percent of Indonesia's total land area. However, in the mid-1980s this number rose to almost 25 percent until the late 1990s. Starting from 1998 another upsurge (due to the establishment of large scale plantations - in particular palm oil) made this number reach the current level of 30 percent.
Indonesia's agriculture sector is forecast to continue growing, albeit at a lower pace compared to the industryand services sectors. 2010 2011 2012 2013 2014 Agricultural growth (annual percent change) 2.9 3.0 4.0 3.4¹ 2.4¹
¹ indicates a forecast
Source: World Bank
The agricultural sector of Indonesia comprises large plantations (both state-owned and private) and smallholder production modes. The large plantations tend to focus on commodities which are important export products (palm oil and rubber), while the smallhold
With its vast and abundant fertile soils Indonesia is a major global key producer of a wide variety of agricultural tropical products, and although agriculture's share of the country's gross domestic product (GDP) has declined markedly during the last five decades, it still provides income for the majority of Indonesian households today. In 2012 this sector employed around 49 million Indonesian individuals, which represents 41 percent of the total Indonesian labor force. 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. 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).
Between the mid-1960s and mid-1980s the percentage of Indonesian land area that was used for agriculture stayed constant at around 21 percent of Indonesia's total land area. However, in the mid-1980s this number rose to almost 25 percent until the late 1990s. Starting from 1998 another upsurge (due to the establishment of large scale plantations - in particular palm oil) made this number reach the current level of 30 percent.
Indonesia's agriculture sector is forecast to continue growing, albeit at a lower pace compared to the industryand services sectors. 2010 2011 2012 2013 2014 Agricultural growth (annual percent change) 2.9 3.0 4.0 3.4¹ 2.4¹
¹ indicates a forecast
Source: World Bank
The agricultural sector of Indonesia comprises large plantations (both state-owned and private) and smallholder production modes. The large plantations tend to focus on commodities which are important export products (palm oil and rubber), while the smallhold