ABSTRACT
The Indonesian National Medium-Term Development Plan (RPJMN) 2025–2029 positions the agricultural sector as a central pillar in Indonesia’s inclusive and sustainable economic transformation. This article presents a comprehensive analysis of national agricultural development strategies by highlighting key policies such as institutional strengthening of farmers through cooperatives, agricultural sector digitalization, and downstream processing and industrialization of food commodities. The study also compares Indonesia’s approach with that of other Asian countries such as China, Malaysia, Thailand, Taiwan, and Vietnam, which have successfully built modern agricultural systems based on technology and multi-stakeholder synergy. The findings indicate that Indonesia’s success largely depends on institutional capacity, progressive regulations, and cross-sector collaboration to build a resilient, self-reliant, and globally competitive agricultural ecosystem.
Keywords: agricultural development, RPJMN 2025–2029, economic transformation, cooperatives, farmer institutions, food security, national policy
INTRODUCTION
Agricultural development is integral to Indonesia’s national development strategy, aiming to foster inclusive, sustainable, and equitable economic growth. Within the framework of the National Medium-Term Development Plan (RPJMN) 2025–2029, agriculture is identified as a key sector in ensuring national food security and as a driver of structural economic transformation and reduction of regional disparities.
As an agrarian country with over 27 million farming households (Badan Pusat Statistik, 2023), Indonesia’s agricultural sector is strategically responsible for employment creation, social stability, and domestic food provision. However, the sector faces complex structural challenges such as fragmented land ownership, stagnant productivity, limited access to finance, technology, and markets, and high vulnerability to climate change impacts (OECD & FAO, 2022).
In response to these challenges, the Ministry of National Development Planning (Bappenas) has established six national transformation agendas in RPJMN 2025–2029, with local resource-based economic transformation, particularly in agriculture, serving as a primary pillar (Bappenas, 2023a). Accordingly, agricultural development planning is oriented not only toward production increases but also toward enhancing value addition, promoting region-based industrialization, strengthening farmer institutions, and accelerating the adoption of innovations and digital technologies.
This article aims to systematically assess Indonesia’s national agricultural development strategy within the RPJMN 2025–2029. The focus includes policy visions for agricultural development, directions for agriculture-based economic transformation, institutional strengthening through cooperatives and farmer groups, and implementation challenges and opportunities. Special attention is given to the role of technological innovation and digitalization as key enablers of a resilient and sustainable food system in Indonesia.
Theoretical framework
Agricultural development has long been a central theme in development economics, public policy, and social sciences. Ellis (1992) argued that agricultural development is not solely concerned with increasing food production but also encompasses structural transformations within rural social and economic systems. This includes the dynamics of agrarian relations, resource distribution, and the role of local institutions in facilitating inclusive development.
Pretty's (2008) concept of sustainable development emphasizes the integration of economic, social, and environmental dimensions. Within this framework, agriculture is a source of income and food and serves a critical ecological function in maintaining natural system balance. This approach is increasingly relevant in Indonesia amid growing pressure on natural resources and climate vulnerability.
Historically, Indonesia’s agricultural policy has been influenced by both domestic and global dynamics. Timmer (2002) underscored that agricultural productivity growth is a prerequisite for inclusive economic growth, particularly in developing countries heavily reliant on the primary sector. Transformation of this sector is seen as a key to escaping the middle-income trap (World Bank, 2020).
Moreover, Byerlee, de Janvry, and Sadoulet (2009) emphasized the importance of downstream integration and farmer inclusion in modern agribusiness systems as part of an agricultural transformation strategy. From an institutional perspective, North (1990) and Uphoff (1998) highlighted that the success of development programs is highly dependent on the effectiveness of local institutions in organizing and empowering farmers.
In the context of national policy, both the Long-Term National Development Plan (RPJPN) 2025–2045 and the National Medium-Term Development Plan (RPJMN) 2025–2029 underscore the need to strengthen food and agricultural ecosystems within a green and blue economy transformation framework (Bappenas, 2023b). This includes strategic agendas such as agricultural digitalization, farmer-corporation-based food area development, and integrating research, innovation, and public policy.
The Merah Putih Cooperative (Koperasi Merah Putih), a new institutional model developed by the central government, emerges as a strategic innovation for empowering farmers and fishers. Unlike conventional cooperatives that are often sectoral and fragmented, the Merah Putih Cooperative is designed as an integrated institutional entity encompassing upstream to downstream activities, grounded in economic nationalism and collective efficiency principles (Ministry of Cooperatives and SMEs, 2024).
THE GOLDEN INDONESIA 2045 VISION AND ITS IMPLICATIONS FOR THE AGRICULTURAL SECTOR
The Golden Indonesia 2045 vision represents Indonesia’s long-term development agenda to position the country among advanced nations by the time it marks its centennial of independence. The Indonesia Vision 2045 document, formulated by Bappenas (2020), identifies four main pillars: (1) human development and mastery of science and technology; (2) sustainable economic development; (3) equitable development; and (4) national resilience and good governance.
In sustainable economic development, agriculture plays a vital role as a food provider, rural economic driver, and ecological steward. Agricultural development within the framework of Golden Indonesia 2045 is directed towards building a food system that is self-sufficient, sovereign, inclusive, and based on high technology and local innovation.
Strategic targets include reducing dependency on food imports, increasing value addition through downstream processing and agro-industrial development, and optimizing land use by developing integrated agricultural zones connected to green industry. The Ministry of Agriculture, through its medium-term strategy, has introduced programs to strengthen farmer corporations, implement digital technologies such as artificial intelligence and big data, and develop integrated ecosystem-based food estates (Ministry of Agriculture, 2023a).
Agricultural transformation also has significant implications for addressing regional disparities in development. A McKinsey report (2019) highlights that Indonesia’s agricultural sector holds considerable potential for productivity improvement through mechanization, market efficiency, and digital integration. This aligns with the broader goals of the Indonesia Vision 2045, which emphasizes inclusive and high-quality economic growth, especially in rural areas.
Regarding sustainability, the RPJPN 2025–2045 incorporates agricultural development into the broader agenda for achieving net-zero emissions. Programs such as climate-smart agriculture, natural resource conservation, and ecosystem restoration are embedded within cross-sectoral strategies designed to be transformative.
Thus, the success of agricultural development during the 2025–2029 RPJMN period is a critical milestone for strengthening national food security and forms the foundation for achieving Indonesia’s grand vision for 2045.
STRATEGIC FRAMEWORK OF INDONESIA NATIONAL MEDIUM-TERM DEVELOPMENT PLAN 2025–2029
In the Technocratic Draft of the National Medium-Term Development Plan (RPJMN) 2025–2029, Bappenas identifies six major national transformation agendas. One of the key pillars is economic transformation based on local resources, wherein the agricultural sector is positioned as a strategic priority. The agricultural strategic framework is designed to address multidimensional challenges, including the global food crisis, climate change, digitalization of the economy, and persistent welfare disparities among farmers (Bappenas, 2023c).
The RPJMN 2025–2029 outlines five foundational pillars for agricultural development:
- Strengthening farmer institutions and agricultural corporatization
The government promotes the empowerment of farmer economic organizations through modern cooperative models, farmer corporations, and strategic partnerships between farmers and agribusiness entities. The Merah Putih Cooperative (Koperasi Merah Putih) exemplifies a new institutional model designed to integrate farming enterprises from production and post-harvest processing to distribution and marketing within a framework of economic nationalism. This institutional strengthening also focuses on enhancing access to finance, technology, and market information.
- Transformation of the food system and agricultural downstreaming
The focus is on increasing the added value of agricultural products through processing, downstream development, and agro-industry. The government aims to develop integrated food production zones, build processing industries in key production centers, and establish efficient logistics systems. This strategy is expected to generate quality rural employment and enhance the competitiveness of agricultural commodities in domestic and international markets.
- Digitalization and technological innovation in agriculture
Accelerating the adoption of digital technologies such as smart farming, precision agriculture, and geospatial information systems is a policy priority. The government also encourages applied agricultural research, strengthening vocational education institutions, and fostering research collaboration among universities, private sector actors, and farmers. Digitalization aims to improve production efficiency and ensure supply chain transparency and product traceability.
- Sustainable agriculture and climate change adaptation
A low-emission, climate-resilient development approach serves as the foundation for future agricultural systems. Key programs include land conservation, sustainable water management, and ecosystem regeneration to support long-term productivity and environmental sustainability. These efforts align with Indonesia’s commitments under the Paris Agreement and the Sustainable Development Goals (SDGs).
- Improvement of farmers’ welfare and social protection in agriculture
Policies aim to improve farmers’ income through subsidy system reform, price protection mechanisms, social security, and access to agricultural insurance. The government is also integrating rural poverty reduction efforts through productive labor-intensive programs, direct agricultural cash assistance, and ongoing agrarian reform initiatives.
This strategic framework is supported by key performance indicators (KPIs) integrated into the national monitoring system and SDG reporting mechanisms. These include indicators such as increased agricultural added value, reduced rural poverty, improved food security index, and greater agricultural contributions to national exports.
Strategic Framework for the Agricultural Sector within the RPJMN 2025–2029
The RPJMN 2025–2029 outlines the strategic direction for national agricultural development across five interrelated frameworks: (1) improving productivity and competitiveness; (2) strengthening national food security; (3) accelerating agricultural downstreaming and industrialization; (4) developing farmer-corporation-based agricultural zones; and (5) digitalization and the adoption of technological innovation.
First, productivity and competitiveness enhancement are pursued through the modernization of agricultural infrastructure, human resource capacity-building, and ecological intensification. These programs target strategic commodities such as rice, maize, soybeans, horticulture, and high-value export crops (Bappenas, 2023c). The transformation also involves strengthening technology-based extension systems and improving agricultural machinery and equipment access.
Second, in strengthening national food security, strategies focus on building strategic food reserves, promoting food diversification based on local wisdom (e.g., sorghum, sago, tubers), and enhancing national logistics and distribution systems. The government is also developing early warning systems for food crisis mitigation and integrating cross-sectoral national food policies (FAO, 2022).
Third, the acceleration of agricultural downstreaming and industrialization aims to create agro-industrial ecosystems that add value to products, generate rural employment, and strengthen the export potential of priority commodities. This includes investment in post-harvest processing infrastructure, supply chain integration, and strengthening quality standards and certification systems.
Fourth, the development of agricultural zones based on farmer corporatization seeks to consolidate smallholder farming through collective institutional models such as food estates, food production centers, and the Merah Putih Cooperative. This model integrates production, financing, distribution, and market access, emphasizing economies of scale and national agribusiness system efficiency (Ministry of Agriculture, 2023b).
Fifth, digitalization and technological innovation are leverage points in transforming the agricultural sector. The government is encouraging the adoption of smart farming technologies, digital agribusiness transactions, and data integration through the One Food Data System (Satu Data Pangan). These technologies are also used in traceability systems, climate mapping, risk management, and digital financing access (AIPA, 2024).
These five pillars mutually reinforce one another in building a more resilient, efficient, and inclusive national agricultural system. The strategies are not solely oriented toward sectoral economic growth, but are also aligned with achieving the Sustainable Development Goals (SDGs) and the broader vision of Golden Indonesia 2045.
Institutional Framework and Inclusive Models: The Role of the Merah Putih Cooperative in Agricultural Development
Institutional frameworks in agriculture are fundamental to the successful transformation of Indonesia’s agricultural sector. In the RPJMN 2025–2029, strengthening farmer institutions is a core strategy to address persistent structural challenges, including weak farmer bargaining power, limited access to finance, and unequal access to technology and markets (Bappenas, 2023a). In response to these issues, the government has introduced a new institutional model known as the Merah Putih Cooperative, which is a strategic, inclusive intervention grounded in economic nationalism.
The Merah Putih Cooperative is designed as an institutional platform that integrates the entire agricultural value chain—from production and financing to distribution and marketing—within a unified, national-scale ecosystem. Unlike conventional cooperatives, which are often sectoral and fragmented, the Merah Putih Cooperative employs both vertical and horizontal integration, enabling the consolidation of farmer capacities through community-based economic organization. Its key characteristics include being digital-native from inception, integrated with inclusive financing schemes such as Kredit Usaha Rakyat (KUR) and Ultra Micro Financing (UMi), and coordinated across ministries and government agencies, including the Ministry of Cooperatives and SMEs, the Ministry of Agriculture, and Bappenas.
The cooperative plays a strategic role in the economic transformation of agriculture by providing collective access to agricultural inputs, strengthening farmer bargaining positions within supply chains, accelerating the adoption of agricultural technology, and expanding access to domestic and export markets. Furthermore, it is envisioned as a state partner in managing food reserves, promoting local food diversification, and supporting community-based food security programs.
Several key regulations reinforce the government’s commitment to institutional strengthening. Presidential Regulation No. 18 of 2020, which laid the RPJMN 2025–2029 foundation, emphasizes the reform of people’s economic institutions. In addition, Law No. 11 of 2020 on Job Creation and Government Regulation No. 7 of 2021 provide legal foundations for facilitating cooperative development, simplifying licensing, and expanding financing access for cooperatives and MSMEs. The Ministry of Cooperatives and SMEs, through Ministerial Regulation No. 8 of 2021, encourages digital cooperative transformation, while the Ministry of Agriculture reinforces cooperative integration in agricultural area development through Ministerial Regulation No. 3 of 2024 and Regulation No. 13 of 2023 on Farmer Economic Institutions. Furthermore, Presidential Regulation No. 2 of 2022 on the Development of National Entrepreneurship recognizes cooperatives as vital entities in the ecosystem of productive, community-based entrepreneurship.
Despite these regulatory frameworks, implementing the Merah Putih Cooperative still faces several challenges. These include institutional resistance from legacy cooperatives, limited managerial capacity among human resources, uneven digital infrastructure in underdeveloped areas, and a lack of regulatory harmonization across sectors. As such, acceleration efforts are needed, including consolidating a national cooperative database, training cooperative cadres in digital business management, institutional incentive schemes, and integrating cooperatives into regional development planning and national strategic programs.
With a modern, participatory, and inclusive institutional design—supported by a comprehensive policy ecosystem—the Merah Putih Cooperative holds significant potential to become the backbone of Indonesia’s agricultural institutions, capable of responding to future challenges and realizing a people-centered economic transformation.
INDONESIA MINISTRY OF AGRICULTURE STRATEGIES FOR 2025–2029
Agricultural statistical data from Indonesia’s Central Statistics Agency (Badan Pusat Statistik, 2023a) serve as a critical foundation for designing, monitoring, and evaluating national agricultural development policies. According to the 2023 Agricultural Census, the number of Agricultural Household Enterprises (RTUP) in Indonesia reached 28,419,398, an increase of 8.74% from 26,135,469 households recorded in 2013. This growth indicates that agriculture remains a primary livelihood source for rural households (Badan Pusat Statistik, 2023b).
Subsectoral data reveal that the majority of RTUPs are engaged in food crop production, followed by livestock and plantation subsectors. This confirms the dominant role of food crops in the national agricultural structure, though other subsectors also hold considerable potential for expansion, particularly regarding production diversification and national food security.
Moreover, the census reports that 17 million farmers are classified as smallholder farmers cultivating less than 0.5 hectares of land. The high proportion of smallholder farmers underscores structural land inequality. It highlights the urgency of agrarian reform, productivity enhancement, and the strengthening of small-scale farmer institutions through cooperatives and farmer corporations.
From a macroeconomic perspective, the agricultural sector contributed 12.53% to Indonesia’s Gross Domestic Product (GDP) in 2023. Although this figure represents a relative decline compared to the previous decade, the sector remains a vital pillar of the national economy, especially as a major source of employment and domestic food supply (Badan Pusat Statistik, 2023c).
As the primary executor of agricultural policy, the Ministry of Agriculture has formulated its 2025–2029 development strategy in alignment with the national transformation agenda mandated by the RPJMN. The strategy emphasizes productivity enhancement, food security, farmer welfare, and the integration of agricultural institutions within a sustainable development framework.
First, the Ministry focuses on intensification and extensification programs. Intensification efforts include increasing planting indices, the use of high-yielding seed varieties, and the provision of modern agricultural machinery (alsintan), such as two- and four-wheeled tractors, rice transplanters, and combine harvesters. These programs aim to increase planting efficiency by 30% and reduce post-harvest losses by 20%. Meanwhile, extensification targets the development of three million hectares of new agricultural land outside Java, particularly in Central Kalimantan, Papua, and Sulawesi. The goal of one million hectares of newly established rice fields in 2025 is part of the national food estate program, integrated with water-saving irrigation systems (Ministry of Agriculture, 2024).
Second, land optimization efforts are supported by improved irrigation infrastructure in collaboration with the Ministry of Public Works and Housing (PUPR). Activities include the rehabilitation of 3.2 million hectares of irrigation networks, constructing 1,000 village reservoirs (embung), and digitalizing agricultural water management through Internet of Things (IoT)-based platforms. The government has designated 500 priority irrigation areas within agrarian ecosystem zones that support sustainable and climate-resilient agriculture (Presidential Instruction, 2025).
Third, the Ministry is strengthening the integrated agricultural inputs and infrastructure provision. During the 2025–2029 period, the government, through the Ministry of Agriculture, targets the distribution of certified superior seeds for five million hectares, 1.14 million units of pre- and post-harvest machinery, and 9.03 million tons of subsidized fertilizer, including reformulated organic fertilizers based on local microorganisms. Efficiency in input distribution is promoted through the establishment of 150 regional fertilizer warehouses operated by farmer cooperatives.
Fourth, the development of agricultural human resources is prioritized. The Ministry targets the training of 65,170 modern agricultural workers through the Youth Agri-preneur Program, focusing on smart farming, digital marketing, and agribusiness management. Using a competency-based curriculum, the program is implemented in collaboration with agricultural polytechnics, vocational schools, and agricultural training centers (Balai Besar Pelatihan Pertanian).
Fifth, cross-sectoral collaboration is key to the successful implementation of strategic programs. The Ministry works with the Ministry of Public Works and Housing (PUPR) on infrastructure development and with the Ministry of Cooperatives and SMEs to build a collective, institution-based farming ecosystem. In addition, the Ministry collaborates with state-owned food enterprises (BUMN), agritech startups, and universities to promote innovation and market access expansion.
All of these strategies are supported by national policy instruments such as Presidential Regulation No. 131 of 2024 on Science and Technology-Based Agricultural Development, Ministry of Agriculture Regulation No. 3 of 2024 on Agricultural Area Development, and Ministry of Agriculture Regulation No. 11 of 2024 on Investment Incentives in the Livestock Sub-sector. Presidential Instruction No. 2 of 2025 on the Acceleration of Irrigation Rehabilitation and Operations provides a key foundation for production infrastructure enhancement, while the Satu Data Pertanian (One Agricultural Data) Program serves as the basis for evidence-based agricultural governance.
With a holistic, data-driven, and collaborative strategy, the Ministry of Agriculture aims to accelerate the transformation of the agricultural sector toward a resilient national food system that is climate-adaptive and globally competitive, in line with the Golden Indonesia 2045 vision.
A Regulatory Perspective: Strengthening Investment and Technological Development in Indonesian Agriculture
To accelerate the transformation of national agriculture, the Government of Indonesia has enacted a series of strategic policies aimed at fostering investment and the development of agricultural technologies. These efforts are intended to enhance productivity, competitiveness, and sustainability in alignment with national development priorities and the vision of Golden Indonesia 2045.
Presidential Regulation No. 131 of 2024 on Science and Technology-Based Agricultural Development marks a major milestone in promoting innovation adoption within the sector. The regulation emphasizes the application of modern technologies—including precision farming systems, automation, and artificial intelligence—as tools for optimizing resources and improving production efficiency. This approach is complemented by establishing agricultural innovation hubs and business incubators for technology-based agricultural enterprises.
On the investment front, the Indonesian Ministry of Agriculture Regulation No. 11 of 2024 provides fiscal incentives for capital investments in strategic agricultural sub-sectors, particularly in livestock, horticulture, and export-oriented plantations. These incentives include income tax reductions, expedited licensing processes, and support for production facilities through partnership programs with farmer cooperatives and private sector actors.
Ministry of Agriculture Regulation No. 3 of 2024 on Agricultural Area Development governs the development of national agricultural zones. This regulation promotes the consolidation of farming enterprises through corporatization models, integration of value chains from upstream to downstream, and the use of data-driven technologies. Priority agricultural zones are designed as sustainable production centres linked to national logistics systems and export markets.
To support water availability and agricultural infrastructure, Presidential Instruction No. 2 of 2025 mandates the acceleration of irrigation system rehabilitation, improvement, and maintenance. The policy also encourages the digitalization of irrigation management systems, intersectoral planning integration, and the formation of cross-ministerial coordination teams to ensure efficient implementation at the field level.
Beyond regulatory instruments, the government has initiated innovative financing schemes such as green financing and blended finance for sustainable agricultural projects. The Ministry of Agriculture, in collaboration with the Ministry of Finance, is currently developing a Sustainable Agricultural Investment Fund accessible to cooperatives and agricultural MSMEs.
Collectively, these policies demonstrate the government’s strong commitment to establishing an enabling ecosystem for agricultural investment and innovation. With a progressive regulatory framework and robust cross-sectoral support, Indonesia’s agricultural sector is expected to become a new, sustainable engine of economic growth, resilient in times of crisis and inclusive of smallholder farmers.
Comparative Study of Agricultural Development Strategies in other Asian Countries
To strengthen the direction of its national agricultural transformation, Indonesia must learn from the experiences of other Asian countries that have successfully developed productive, competitive, and inclusive agricultural systems. This comparative study examines agricultural development strategies in Taiwan, Vietnam, Malaysia, China, and Thailand, each demonstrating unique yet contextually relevant approaches aligned with Indonesia’s challenges and opportunities.
China: Rural revitalization strategy and agricultural modernization
China has launched its Rural Revitalization Strategy to address the urban–rural divide and modernize agriculture. The strategy includes land reform, rural infrastructure development, and the adoption of advanced technologies such as precision agriculture and digital platforms. China’s government also promotes integration among agriculture, industry, and services to create a sustainable rural economy.
China’s Rural Revitalization Strategy, initiated in 2017, aims to bridge the urban–rural divide and modernize agriculture through comprehensive reforms. Key components include securing transferable land rights, enhancing rural infrastructure, and promoting the adoption of advanced technologies such as precision agriculture and digital platforms (Ministry of Agriculture and Rural Affairs, 2024; State Council of the PRC, 2025). The strategy also emphasizes the integration of agriculture with industry and services to diversify rural economies and improve livelihoods. These initiatives are outlined in the “No. 1 Central Document” for 2025, which sets forth policies to strengthen agriculture, rural areas, and farmers, and to advance all-around rural revitalization. The Ministry of Agriculture and Rural Affairs oversees the implementation of these policies, focusing on agricultural innovation and deepened reforms to build up the country's agricultural strength.
Malaysia: Agricultural corporatization through FELDA and FELCRA
Malaysia has pursued agricultural corporatization through institutions such as the Federal Land Development Authority (FELDA) and the Federal Land Consolidation and Rehabilitation Authority (FELCRA). These organizations aim to improve farmer welfare by consolidating land, developing infrastructure, and providing extension services. FELDA and FELCRA have also played vital roles in plantation development and agricultural productivity improvement through the use of modern technologies (FELCRA Berhad, 2023).
Taiwan: Institutional strengthening and technology adoption
Taiwan has advanced its agricultural sector through robust institutional development and the widespread adoption of modern technologies. A key initiative is the establishment of Agricultural Production and Marketing Groups (APMGs), which aim to enhance production and marketing efficiency. These groups receive government support in the form of management training, production technology, and market access facilitation (Taiwan’s Ministry of Agriculture, 2023). Additionally, Taiwan has promoted the adoption of smart agricultural technologies and sustainable farming practices to boost productivity and competitiveness.
Thailand: Agricultural transformation through the 20-Year strategy and Agriculture 4.0
Thailand has adopted the 20-Year Agriculture and Cooperatives Strategy (2017–2036) to enhance the competitiveness of its agricultural sector through innovation and technology. This strategy comprises eight core missions, including strengthening farmer organizations, improving agricultural product quality, and developing domestic and international marketing channels.
As part of this strategy, Thailand has implemented Agriculture 4.0 policies, which encourage the adoption of smart farming technologies such as drones, IoT sensors, and data analytics to increase efficiency and productivity. The government also introduced the “Smart Farmer” program to attract younger generations to agriculture by providing training and support in modern technology use. In addition, Thailand’s agricultural policy incorporates the late King Bhumibol Adulyadej's “Sufficiency Economy Philosophy,” which emphasizes sustainable development and rural community well-being through balanced and resilient approaches.
Vietnam: Large field model and climate-smart agriculture
Vietnam has implemented the Large Field (LF) model to improve agricultural efficiency, particularly in rice production. This model encourages the consolidation of small farms into larger production units, allowing the application of modern technologies and climate-smart agricultural practices. The government incentivizes farmers and private firms participating in this model, along with technical training and support.
POLICY RECOMMENDATION
Based on a comprehensive review of Indonesia’s agricultural development strategy for 2025–2029, this article proposes five core policy directions to enhance the effectiveness of implementation and support the realization of the Golden Indonesia 2045 vision.
First, strengthening agricultural investment policies through fiscal incentives and regulatory simplification. In reference to Indonesia Presidential Regulation No. 131 of 2024, the government should expand the scope of incentives for both domestic and foreign investors committed to technological transformation and agro-industrial development. Moreover, licensing procedures must be adjusted to accommodate small and medium-sized enterprises, while enhancing the capacity of local governments to attract investment in the agricultural sector.
Second, developing agricultural infrastructure that is adaptive to climate change. Presidential Instruction No. 2 of 2025 should be operationalized through micro-irrigation development, rainwater harvesting systems, and data-driven water management. Infrastructure development must be targeted to support sustainable agricultural zones and improve farmers’ resilience to climatic uncertainty.
Third, reforming farmer economic institutions as a policy priority. Ministry of Agriculture Regulation No. 3 of 2024 and Ministry of Cooperatives Regulation No. 8 of 2021 provide legal foundations for strengthening modern cooperatives and farmer corporatization. The government should offer institutional incentives to cooperatives that integrate technology, financing, and market access successfully. In addition, community-based training and mentoring programs should be scaled up to enhance institutional management capacities at the grassroots level.
Fourth, expanding the adoption of digital and climate-smart agricultural technologies. The government is encouraged to prioritize smart farming programs and Internet of Things (IoT) technologies in food production systems. Inclusive financing instruments—including microcredit and innovation grants—are needed to enable smallholder farmers to access and adopt these technologies.
Fifth, promoting local food diversification and the development of alternative commodity markets. To strengthen food security and reduce dependency on rice, Bappenas and the Ministry of Agriculture should increase support for alternative commodities such as sorghum, porang, and tuber crops. The government must facilitate the development of both domestic and export markets through e-commerce and digital platforms to enhance local food value chains.
These policy recommendations are inter-sectoral and evidence-based, requiring synergy among national and local governments, the private sector, academia, and civil society. Through this collaborative approach, Indonesia’s agricultural development can be directed toward building a competitive, inclusive, and sustainable food system.
CONCLUSION
Indonesia’s National Agricultural Development Plan 2025–2029 serves as a critical foundation for advancing the country’s economic transformation toward the Golden Indonesia 2045 vision. Through the RPJMN and a range of integrated sectoral strategies, the Indonesian government positions agriculture not only as a food provider but also as a key engine for regional economic growth, rural poverty reduction, and the creation of productive employment.
This study emphasizes that future agricultural development policy must go beyond increasing production and focus instead on establishing an inclusive, technology-based, and climate-resilient modern agribusiness system. The institutional strengthening of farmers through cooperatives—particularly the Merah Putih Cooperative model—emerges as a core instrument for building efficient and competitive farm enterprises. This corporatization approach is complemented by adopting digitalization and modernization in production systems, reinforced by inter-ministerial collaboration and private sector involvement.
The Indonesia Ministry of Agriculture’s development strategies over the next five years also reflect a paradigm shift toward sustainable agriculture, prioritizing human capital development, downstream processing, and the expansion of corporatized agricultural zones. In the international context, the experiences of neighboring countries in Southeast and East Asia highlight the importance of integrating technology, institutional frameworks, and market systems. These countries treat agriculture as a strategic component of national development, emphasizing production efficiency, multi-stakeholder partnerships, and data-driven structural reforms. Taiwan’s community-based cooperative model, Vietnam’s linkage chain strategy, Malaysia’s FELDA system, and China and Thailand’s precision agriculture policies are valuable references for Indonesia in designing adaptive strategy.
Overall, this study reaffirms that the success of agricultural development in Indonesia will depend heavily on the country’s boldness in undertaking institutional reform, improving policy implementation at the local level, and ensuring adequate budgetary and regulatory support. With strong synergy among state actors, business entities, research institutions, and civil society, Indonesia holds tremendous potential to build a resilient, self-reliant, and equitable agricultural system that will become a central pillar of the national economy for generations to come.
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National Agricultural Development Planning of Indonesia 2025–2029: Economic Transformation Strategies, Inclusive Institutions, and Sustainable Policies Toward Indonesia's Golden Future 2045
ABSTRACT
The Indonesian National Medium-Term Development Plan (RPJMN) 2025–2029 positions the agricultural sector as a central pillar in Indonesia’s inclusive and sustainable economic transformation. This article presents a comprehensive analysis of national agricultural development strategies by highlighting key policies such as institutional strengthening of farmers through cooperatives, agricultural sector digitalization, and downstream processing and industrialization of food commodities. The study also compares Indonesia’s approach with that of other Asian countries such as China, Malaysia, Thailand, Taiwan, and Vietnam, which have successfully built modern agricultural systems based on technology and multi-stakeholder synergy. The findings indicate that Indonesia’s success largely depends on institutional capacity, progressive regulations, and cross-sector collaboration to build a resilient, self-reliant, and globally competitive agricultural ecosystem.
Keywords: agricultural development, RPJMN 2025–2029, economic transformation, cooperatives, farmer institutions, food security, national policy
INTRODUCTION
Agricultural development is integral to Indonesia’s national development strategy, aiming to foster inclusive, sustainable, and equitable economic growth. Within the framework of the National Medium-Term Development Plan (RPJMN) 2025–2029, agriculture is identified as a key sector in ensuring national food security and as a driver of structural economic transformation and reduction of regional disparities.
As an agrarian country with over 27 million farming households (Badan Pusat Statistik, 2023), Indonesia’s agricultural sector is strategically responsible for employment creation, social stability, and domestic food provision. However, the sector faces complex structural challenges such as fragmented land ownership, stagnant productivity, limited access to finance, technology, and markets, and high vulnerability to climate change impacts (OECD & FAO, 2022).
In response to these challenges, the Ministry of National Development Planning (Bappenas) has established six national transformation agendas in RPJMN 2025–2029, with local resource-based economic transformation, particularly in agriculture, serving as a primary pillar (Bappenas, 2023a). Accordingly, agricultural development planning is oriented not only toward production increases but also toward enhancing value addition, promoting region-based industrialization, strengthening farmer institutions, and accelerating the adoption of innovations and digital technologies.
This article aims to systematically assess Indonesia’s national agricultural development strategy within the RPJMN 2025–2029. The focus includes policy visions for agricultural development, directions for agriculture-based economic transformation, institutional strengthening through cooperatives and farmer groups, and implementation challenges and opportunities. Special attention is given to the role of technological innovation and digitalization as key enablers of a resilient and sustainable food system in Indonesia.
Theoretical framework
Agricultural development has long been a central theme in development economics, public policy, and social sciences. Ellis (1992) argued that agricultural development is not solely concerned with increasing food production but also encompasses structural transformations within rural social and economic systems. This includes the dynamics of agrarian relations, resource distribution, and the role of local institutions in facilitating inclusive development.
Pretty's (2008) concept of sustainable development emphasizes the integration of economic, social, and environmental dimensions. Within this framework, agriculture is a source of income and food and serves a critical ecological function in maintaining natural system balance. This approach is increasingly relevant in Indonesia amid growing pressure on natural resources and climate vulnerability.
Historically, Indonesia’s agricultural policy has been influenced by both domestic and global dynamics. Timmer (2002) underscored that agricultural productivity growth is a prerequisite for inclusive economic growth, particularly in developing countries heavily reliant on the primary sector. Transformation of this sector is seen as a key to escaping the middle-income trap (World Bank, 2020).
Moreover, Byerlee, de Janvry, and Sadoulet (2009) emphasized the importance of downstream integration and farmer inclusion in modern agribusiness systems as part of an agricultural transformation strategy. From an institutional perspective, North (1990) and Uphoff (1998) highlighted that the success of development programs is highly dependent on the effectiveness of local institutions in organizing and empowering farmers.
In the context of national policy, both the Long-Term National Development Plan (RPJPN) 2025–2045 and the National Medium-Term Development Plan (RPJMN) 2025–2029 underscore the need to strengthen food and agricultural ecosystems within a green and blue economy transformation framework (Bappenas, 2023b). This includes strategic agendas such as agricultural digitalization, farmer-corporation-based food area development, and integrating research, innovation, and public policy.
The Merah Putih Cooperative (Koperasi Merah Putih), a new institutional model developed by the central government, emerges as a strategic innovation for empowering farmers and fishers. Unlike conventional cooperatives that are often sectoral and fragmented, the Merah Putih Cooperative is designed as an integrated institutional entity encompassing upstream to downstream activities, grounded in economic nationalism and collective efficiency principles (Ministry of Cooperatives and SMEs, 2024).
THE GOLDEN INDONESIA 2045 VISION AND ITS IMPLICATIONS FOR THE AGRICULTURAL SECTOR
The Golden Indonesia 2045 vision represents Indonesia’s long-term development agenda to position the country among advanced nations by the time it marks its centennial of independence. The Indonesia Vision 2045 document, formulated by Bappenas (2020), identifies four main pillars: (1) human development and mastery of science and technology; (2) sustainable economic development; (3) equitable development; and (4) national resilience and good governance.
In sustainable economic development, agriculture plays a vital role as a food provider, rural economic driver, and ecological steward. Agricultural development within the framework of Golden Indonesia 2045 is directed towards building a food system that is self-sufficient, sovereign, inclusive, and based on high technology and local innovation.
Strategic targets include reducing dependency on food imports, increasing value addition through downstream processing and agro-industrial development, and optimizing land use by developing integrated agricultural zones connected to green industry. The Ministry of Agriculture, through its medium-term strategy, has introduced programs to strengthen farmer corporations, implement digital technologies such as artificial intelligence and big data, and develop integrated ecosystem-based food estates (Ministry of Agriculture, 2023a).
Agricultural transformation also has significant implications for addressing regional disparities in development. A McKinsey report (2019) highlights that Indonesia’s agricultural sector holds considerable potential for productivity improvement through mechanization, market efficiency, and digital integration. This aligns with the broader goals of the Indonesia Vision 2045, which emphasizes inclusive and high-quality economic growth, especially in rural areas.
Regarding sustainability, the RPJPN 2025–2045 incorporates agricultural development into the broader agenda for achieving net-zero emissions. Programs such as climate-smart agriculture, natural resource conservation, and ecosystem restoration are embedded within cross-sectoral strategies designed to be transformative.
Thus, the success of agricultural development during the 2025–2029 RPJMN period is a critical milestone for strengthening national food security and forms the foundation for achieving Indonesia’s grand vision for 2045.
STRATEGIC FRAMEWORK OF INDONESIA NATIONAL MEDIUM-TERM DEVELOPMENT PLAN 2025–2029
In the Technocratic Draft of the National Medium-Term Development Plan (RPJMN) 2025–2029, Bappenas identifies six major national transformation agendas. One of the key pillars is economic transformation based on local resources, wherein the agricultural sector is positioned as a strategic priority. The agricultural strategic framework is designed to address multidimensional challenges, including the global food crisis, climate change, digitalization of the economy, and persistent welfare disparities among farmers (Bappenas, 2023c).
The RPJMN 2025–2029 outlines five foundational pillars for agricultural development:
The government promotes the empowerment of farmer economic organizations through modern cooperative models, farmer corporations, and strategic partnerships between farmers and agribusiness entities. The Merah Putih Cooperative (Koperasi Merah Putih) exemplifies a new institutional model designed to integrate farming enterprises from production and post-harvest processing to distribution and marketing within a framework of economic nationalism. This institutional strengthening also focuses on enhancing access to finance, technology, and market information.
The focus is on increasing the added value of agricultural products through processing, downstream development, and agro-industry. The government aims to develop integrated food production zones, build processing industries in key production centers, and establish efficient logistics systems. This strategy is expected to generate quality rural employment and enhance the competitiveness of agricultural commodities in domestic and international markets.
Accelerating the adoption of digital technologies such as smart farming, precision agriculture, and geospatial information systems is a policy priority. The government also encourages applied agricultural research, strengthening vocational education institutions, and fostering research collaboration among universities, private sector actors, and farmers. Digitalization aims to improve production efficiency and ensure supply chain transparency and product traceability.
A low-emission, climate-resilient development approach serves as the foundation for future agricultural systems. Key programs include land conservation, sustainable water management, and ecosystem regeneration to support long-term productivity and environmental sustainability. These efforts align with Indonesia’s commitments under the Paris Agreement and the Sustainable Development Goals (SDGs).
Policies aim to improve farmers’ income through subsidy system reform, price protection mechanisms, social security, and access to agricultural insurance. The government is also integrating rural poverty reduction efforts through productive labor-intensive programs, direct agricultural cash assistance, and ongoing agrarian reform initiatives.
This strategic framework is supported by key performance indicators (KPIs) integrated into the national monitoring system and SDG reporting mechanisms. These include indicators such as increased agricultural added value, reduced rural poverty, improved food security index, and greater agricultural contributions to national exports.
Strategic Framework for the Agricultural Sector within the RPJMN 2025–2029
The RPJMN 2025–2029 outlines the strategic direction for national agricultural development across five interrelated frameworks: (1) improving productivity and competitiveness; (2) strengthening national food security; (3) accelerating agricultural downstreaming and industrialization; (4) developing farmer-corporation-based agricultural zones; and (5) digitalization and the adoption of technological innovation.
First, productivity and competitiveness enhancement are pursued through the modernization of agricultural infrastructure, human resource capacity-building, and ecological intensification. These programs target strategic commodities such as rice, maize, soybeans, horticulture, and high-value export crops (Bappenas, 2023c). The transformation also involves strengthening technology-based extension systems and improving agricultural machinery and equipment access.
Second, in strengthening national food security, strategies focus on building strategic food reserves, promoting food diversification based on local wisdom (e.g., sorghum, sago, tubers), and enhancing national logistics and distribution systems. The government is also developing early warning systems for food crisis mitigation and integrating cross-sectoral national food policies (FAO, 2022).
Third, the acceleration of agricultural downstreaming and industrialization aims to create agro-industrial ecosystems that add value to products, generate rural employment, and strengthen the export potential of priority commodities. This includes investment in post-harvest processing infrastructure, supply chain integration, and strengthening quality standards and certification systems.
Fourth, the development of agricultural zones based on farmer corporatization seeks to consolidate smallholder farming through collective institutional models such as food estates, food production centers, and the Merah Putih Cooperative. This model integrates production, financing, distribution, and market access, emphasizing economies of scale and national agribusiness system efficiency (Ministry of Agriculture, 2023b).
Fifth, digitalization and technological innovation are leverage points in transforming the agricultural sector. The government is encouraging the adoption of smart farming technologies, digital agribusiness transactions, and data integration through the One Food Data System (Satu Data Pangan). These technologies are also used in traceability systems, climate mapping, risk management, and digital financing access (AIPA, 2024).
These five pillars mutually reinforce one another in building a more resilient, efficient, and inclusive national agricultural system. The strategies are not solely oriented toward sectoral economic growth, but are also aligned with achieving the Sustainable Development Goals (SDGs) and the broader vision of Golden Indonesia 2045.
Institutional Framework and Inclusive Models: The Role of the Merah Putih Cooperative in Agricultural Development
Institutional frameworks in agriculture are fundamental to the successful transformation of Indonesia’s agricultural sector. In the RPJMN 2025–2029, strengthening farmer institutions is a core strategy to address persistent structural challenges, including weak farmer bargaining power, limited access to finance, and unequal access to technology and markets (Bappenas, 2023a). In response to these issues, the government has introduced a new institutional model known as the Merah Putih Cooperative, which is a strategic, inclusive intervention grounded in economic nationalism.
The Merah Putih Cooperative is designed as an institutional platform that integrates the entire agricultural value chain—from production and financing to distribution and marketing—within a unified, national-scale ecosystem. Unlike conventional cooperatives, which are often sectoral and fragmented, the Merah Putih Cooperative employs both vertical and horizontal integration, enabling the consolidation of farmer capacities through community-based economic organization. Its key characteristics include being digital-native from inception, integrated with inclusive financing schemes such as Kredit Usaha Rakyat (KUR) and Ultra Micro Financing (UMi), and coordinated across ministries and government agencies, including the Ministry of Cooperatives and SMEs, the Ministry of Agriculture, and Bappenas.
The cooperative plays a strategic role in the economic transformation of agriculture by providing collective access to agricultural inputs, strengthening farmer bargaining positions within supply chains, accelerating the adoption of agricultural technology, and expanding access to domestic and export markets. Furthermore, it is envisioned as a state partner in managing food reserves, promoting local food diversification, and supporting community-based food security programs.
Several key regulations reinforce the government’s commitment to institutional strengthening. Presidential Regulation No. 18 of 2020, which laid the RPJMN 2025–2029 foundation, emphasizes the reform of people’s economic institutions. In addition, Law No. 11 of 2020 on Job Creation and Government Regulation No. 7 of 2021 provide legal foundations for facilitating cooperative development, simplifying licensing, and expanding financing access for cooperatives and MSMEs. The Ministry of Cooperatives and SMEs, through Ministerial Regulation No. 8 of 2021, encourages digital cooperative transformation, while the Ministry of Agriculture reinforces cooperative integration in agricultural area development through Ministerial Regulation No. 3 of 2024 and Regulation No. 13 of 2023 on Farmer Economic Institutions. Furthermore, Presidential Regulation No. 2 of 2022 on the Development of National Entrepreneurship recognizes cooperatives as vital entities in the ecosystem of productive, community-based entrepreneurship.
Despite these regulatory frameworks, implementing the Merah Putih Cooperative still faces several challenges. These include institutional resistance from legacy cooperatives, limited managerial capacity among human resources, uneven digital infrastructure in underdeveloped areas, and a lack of regulatory harmonization across sectors. As such, acceleration efforts are needed, including consolidating a national cooperative database, training cooperative cadres in digital business management, institutional incentive schemes, and integrating cooperatives into regional development planning and national strategic programs.
With a modern, participatory, and inclusive institutional design—supported by a comprehensive policy ecosystem—the Merah Putih Cooperative holds significant potential to become the backbone of Indonesia’s agricultural institutions, capable of responding to future challenges and realizing a people-centered economic transformation.
INDONESIA MINISTRY OF AGRICULTURE STRATEGIES FOR 2025–2029
Agricultural statistical data from Indonesia’s Central Statistics Agency (Badan Pusat Statistik, 2023a) serve as a critical foundation for designing, monitoring, and evaluating national agricultural development policies. According to the 2023 Agricultural Census, the number of Agricultural Household Enterprises (RTUP) in Indonesia reached 28,419,398, an increase of 8.74% from 26,135,469 households recorded in 2013. This growth indicates that agriculture remains a primary livelihood source for rural households (Badan Pusat Statistik, 2023b).
Subsectoral data reveal that the majority of RTUPs are engaged in food crop production, followed by livestock and plantation subsectors. This confirms the dominant role of food crops in the national agricultural structure, though other subsectors also hold considerable potential for expansion, particularly regarding production diversification and national food security.
Moreover, the census reports that 17 million farmers are classified as smallholder farmers cultivating less than 0.5 hectares of land. The high proportion of smallholder farmers underscores structural land inequality. It highlights the urgency of agrarian reform, productivity enhancement, and the strengthening of small-scale farmer institutions through cooperatives and farmer corporations.
From a macroeconomic perspective, the agricultural sector contributed 12.53% to Indonesia’s Gross Domestic Product (GDP) in 2023. Although this figure represents a relative decline compared to the previous decade, the sector remains a vital pillar of the national economy, especially as a major source of employment and domestic food supply (Badan Pusat Statistik, 2023c).
As the primary executor of agricultural policy, the Ministry of Agriculture has formulated its 2025–2029 development strategy in alignment with the national transformation agenda mandated by the RPJMN. The strategy emphasizes productivity enhancement, food security, farmer welfare, and the integration of agricultural institutions within a sustainable development framework.
First, the Ministry focuses on intensification and extensification programs. Intensification efforts include increasing planting indices, the use of high-yielding seed varieties, and the provision of modern agricultural machinery (alsintan), such as two- and four-wheeled tractors, rice transplanters, and combine harvesters. These programs aim to increase planting efficiency by 30% and reduce post-harvest losses by 20%. Meanwhile, extensification targets the development of three million hectares of new agricultural land outside Java, particularly in Central Kalimantan, Papua, and Sulawesi. The goal of one million hectares of newly established rice fields in 2025 is part of the national food estate program, integrated with water-saving irrigation systems (Ministry of Agriculture, 2024).
Second, land optimization efforts are supported by improved irrigation infrastructure in collaboration with the Ministry of Public Works and Housing (PUPR). Activities include the rehabilitation of 3.2 million hectares of irrigation networks, constructing 1,000 village reservoirs (embung), and digitalizing agricultural water management through Internet of Things (IoT)-based platforms. The government has designated 500 priority irrigation areas within agrarian ecosystem zones that support sustainable and climate-resilient agriculture (Presidential Instruction, 2025).
Third, the Ministry is strengthening the integrated agricultural inputs and infrastructure provision. During the 2025–2029 period, the government, through the Ministry of Agriculture, targets the distribution of certified superior seeds for five million hectares, 1.14 million units of pre- and post-harvest machinery, and 9.03 million tons of subsidized fertilizer, including reformulated organic fertilizers based on local microorganisms. Efficiency in input distribution is promoted through the establishment of 150 regional fertilizer warehouses operated by farmer cooperatives.
Fourth, the development of agricultural human resources is prioritized. The Ministry targets the training of 65,170 modern agricultural workers through the Youth Agri-preneur Program, focusing on smart farming, digital marketing, and agribusiness management. Using a competency-based curriculum, the program is implemented in collaboration with agricultural polytechnics, vocational schools, and agricultural training centers (Balai Besar Pelatihan Pertanian).
Fifth, cross-sectoral collaboration is key to the successful implementation of strategic programs. The Ministry works with the Ministry of Public Works and Housing (PUPR) on infrastructure development and with the Ministry of Cooperatives and SMEs to build a collective, institution-based farming ecosystem. In addition, the Ministry collaborates with state-owned food enterprises (BUMN), agritech startups, and universities to promote innovation and market access expansion.
All of these strategies are supported by national policy instruments such as Presidential Regulation No. 131 of 2024 on Science and Technology-Based Agricultural Development, Ministry of Agriculture Regulation No. 3 of 2024 on Agricultural Area Development, and Ministry of Agriculture Regulation No. 11 of 2024 on Investment Incentives in the Livestock Sub-sector. Presidential Instruction No. 2 of 2025 on the Acceleration of Irrigation Rehabilitation and Operations provides a key foundation for production infrastructure enhancement, while the Satu Data Pertanian (One Agricultural Data) Program serves as the basis for evidence-based agricultural governance.
With a holistic, data-driven, and collaborative strategy, the Ministry of Agriculture aims to accelerate the transformation of the agricultural sector toward a resilient national food system that is climate-adaptive and globally competitive, in line with the Golden Indonesia 2045 vision.
A Regulatory Perspective: Strengthening Investment and Technological Development in Indonesian Agriculture
To accelerate the transformation of national agriculture, the Government of Indonesia has enacted a series of strategic policies aimed at fostering investment and the development of agricultural technologies. These efforts are intended to enhance productivity, competitiveness, and sustainability in alignment with national development priorities and the vision of Golden Indonesia 2045.
Presidential Regulation No. 131 of 2024 on Science and Technology-Based Agricultural Development marks a major milestone in promoting innovation adoption within the sector. The regulation emphasizes the application of modern technologies—including precision farming systems, automation, and artificial intelligence—as tools for optimizing resources and improving production efficiency. This approach is complemented by establishing agricultural innovation hubs and business incubators for technology-based agricultural enterprises.
On the investment front, the Indonesian Ministry of Agriculture Regulation No. 11 of 2024 provides fiscal incentives for capital investments in strategic agricultural sub-sectors, particularly in livestock, horticulture, and export-oriented plantations. These incentives include income tax reductions, expedited licensing processes, and support for production facilities through partnership programs with farmer cooperatives and private sector actors.
Ministry of Agriculture Regulation No. 3 of 2024 on Agricultural Area Development governs the development of national agricultural zones. This regulation promotes the consolidation of farming enterprises through corporatization models, integration of value chains from upstream to downstream, and the use of data-driven technologies. Priority agricultural zones are designed as sustainable production centres linked to national logistics systems and export markets.
To support water availability and agricultural infrastructure, Presidential Instruction No. 2 of 2025 mandates the acceleration of irrigation system rehabilitation, improvement, and maintenance. The policy also encourages the digitalization of irrigation management systems, intersectoral planning integration, and the formation of cross-ministerial coordination teams to ensure efficient implementation at the field level.
Beyond regulatory instruments, the government has initiated innovative financing schemes such as green financing and blended finance for sustainable agricultural projects. The Ministry of Agriculture, in collaboration with the Ministry of Finance, is currently developing a Sustainable Agricultural Investment Fund accessible to cooperatives and agricultural MSMEs.
Collectively, these policies demonstrate the government’s strong commitment to establishing an enabling ecosystem for agricultural investment and innovation. With a progressive regulatory framework and robust cross-sectoral support, Indonesia’s agricultural sector is expected to become a new, sustainable engine of economic growth, resilient in times of crisis and inclusive of smallholder farmers.
Comparative Study of Agricultural Development Strategies in other Asian Countries
To strengthen the direction of its national agricultural transformation, Indonesia must learn from the experiences of other Asian countries that have successfully developed productive, competitive, and inclusive agricultural systems. This comparative study examines agricultural development strategies in Taiwan, Vietnam, Malaysia, China, and Thailand, each demonstrating unique yet contextually relevant approaches aligned with Indonesia’s challenges and opportunities.
China: Rural revitalization strategy and agricultural modernization
China has launched its Rural Revitalization Strategy to address the urban–rural divide and modernize agriculture. The strategy includes land reform, rural infrastructure development, and the adoption of advanced technologies such as precision agriculture and digital platforms. China’s government also promotes integration among agriculture, industry, and services to create a sustainable rural economy.
China’s Rural Revitalization Strategy, initiated in 2017, aims to bridge the urban–rural divide and modernize agriculture through comprehensive reforms. Key components include securing transferable land rights, enhancing rural infrastructure, and promoting the adoption of advanced technologies such as precision agriculture and digital platforms (Ministry of Agriculture and Rural Affairs, 2024; State Council of the PRC, 2025). The strategy also emphasizes the integration of agriculture with industry and services to diversify rural economies and improve livelihoods. These initiatives are outlined in the “No. 1 Central Document” for 2025, which sets forth policies to strengthen agriculture, rural areas, and farmers, and to advance all-around rural revitalization. The Ministry of Agriculture and Rural Affairs oversees the implementation of these policies, focusing on agricultural innovation and deepened reforms to build up the country's agricultural strength.
Malaysia: Agricultural corporatization through FELDA and FELCRA
Malaysia has pursued agricultural corporatization through institutions such as the Federal Land Development Authority (FELDA) and the Federal Land Consolidation and Rehabilitation Authority (FELCRA). These organizations aim to improve farmer welfare by consolidating land, developing infrastructure, and providing extension services. FELDA and FELCRA have also played vital roles in plantation development and agricultural productivity improvement through the use of modern technologies (FELCRA Berhad, 2023).
Taiwan: Institutional strengthening and technology adoption
Taiwan has advanced its agricultural sector through robust institutional development and the widespread adoption of modern technologies. A key initiative is the establishment of Agricultural Production and Marketing Groups (APMGs), which aim to enhance production and marketing efficiency. These groups receive government support in the form of management training, production technology, and market access facilitation (Taiwan’s Ministry of Agriculture, 2023). Additionally, Taiwan has promoted the adoption of smart agricultural technologies and sustainable farming practices to boost productivity and competitiveness.
Thailand: Agricultural transformation through the 20-Year strategy and Agriculture 4.0
Thailand has adopted the 20-Year Agriculture and Cooperatives Strategy (2017–2036) to enhance the competitiveness of its agricultural sector through innovation and technology. This strategy comprises eight core missions, including strengthening farmer organizations, improving agricultural product quality, and developing domestic and international marketing channels.
As part of this strategy, Thailand has implemented Agriculture 4.0 policies, which encourage the adoption of smart farming technologies such as drones, IoT sensors, and data analytics to increase efficiency and productivity. The government also introduced the “Smart Farmer” program to attract younger generations to agriculture by providing training and support in modern technology use. In addition, Thailand’s agricultural policy incorporates the late King Bhumibol Adulyadej's “Sufficiency Economy Philosophy,” which emphasizes sustainable development and rural community well-being through balanced and resilient approaches.
Vietnam: Large field model and climate-smart agriculture
Vietnam has implemented the Large Field (LF) model to improve agricultural efficiency, particularly in rice production. This model encourages the consolidation of small farms into larger production units, allowing the application of modern technologies and climate-smart agricultural practices. The government incentivizes farmers and private firms participating in this model, along with technical training and support.
POLICY RECOMMENDATION
Based on a comprehensive review of Indonesia’s agricultural development strategy for 2025–2029, this article proposes five core policy directions to enhance the effectiveness of implementation and support the realization of the Golden Indonesia 2045 vision.
First, strengthening agricultural investment policies through fiscal incentives and regulatory simplification. In reference to Indonesia Presidential Regulation No. 131 of 2024, the government should expand the scope of incentives for both domestic and foreign investors committed to technological transformation and agro-industrial development. Moreover, licensing procedures must be adjusted to accommodate small and medium-sized enterprises, while enhancing the capacity of local governments to attract investment in the agricultural sector.
Second, developing agricultural infrastructure that is adaptive to climate change. Presidential Instruction No. 2 of 2025 should be operationalized through micro-irrigation development, rainwater harvesting systems, and data-driven water management. Infrastructure development must be targeted to support sustainable agricultural zones and improve farmers’ resilience to climatic uncertainty.
Third, reforming farmer economic institutions as a policy priority. Ministry of Agriculture Regulation No. 3 of 2024 and Ministry of Cooperatives Regulation No. 8 of 2021 provide legal foundations for strengthening modern cooperatives and farmer corporatization. The government should offer institutional incentives to cooperatives that integrate technology, financing, and market access successfully. In addition, community-based training and mentoring programs should be scaled up to enhance institutional management capacities at the grassroots level.
Fourth, expanding the adoption of digital and climate-smart agricultural technologies. The government is encouraged to prioritize smart farming programs and Internet of Things (IoT) technologies in food production systems. Inclusive financing instruments—including microcredit and innovation grants—are needed to enable smallholder farmers to access and adopt these technologies.
Fifth, promoting local food diversification and the development of alternative commodity markets. To strengthen food security and reduce dependency on rice, Bappenas and the Ministry of Agriculture should increase support for alternative commodities such as sorghum, porang, and tuber crops. The government must facilitate the development of both domestic and export markets through e-commerce and digital platforms to enhance local food value chains.
These policy recommendations are inter-sectoral and evidence-based, requiring synergy among national and local governments, the private sector, academia, and civil society. Through this collaborative approach, Indonesia’s agricultural development can be directed toward building a competitive, inclusive, and sustainable food system.
CONCLUSION
Indonesia’s National Agricultural Development Plan 2025–2029 serves as a critical foundation for advancing the country’s economic transformation toward the Golden Indonesia 2045 vision. Through the RPJMN and a range of integrated sectoral strategies, the Indonesian government positions agriculture not only as a food provider but also as a key engine for regional economic growth, rural poverty reduction, and the creation of productive employment.
This study emphasizes that future agricultural development policy must go beyond increasing production and focus instead on establishing an inclusive, technology-based, and climate-resilient modern agribusiness system. The institutional strengthening of farmers through cooperatives—particularly the Merah Putih Cooperative model—emerges as a core instrument for building efficient and competitive farm enterprises. This corporatization approach is complemented by adopting digitalization and modernization in production systems, reinforced by inter-ministerial collaboration and private sector involvement.
The Indonesia Ministry of Agriculture’s development strategies over the next five years also reflect a paradigm shift toward sustainable agriculture, prioritizing human capital development, downstream processing, and the expansion of corporatized agricultural zones. In the international context, the experiences of neighboring countries in Southeast and East Asia highlight the importance of integrating technology, institutional frameworks, and market systems. These countries treat agriculture as a strategic component of national development, emphasizing production efficiency, multi-stakeholder partnerships, and data-driven structural reforms. Taiwan’s community-based cooperative model, Vietnam’s linkage chain strategy, Malaysia’s FELDA system, and China and Thailand’s precision agriculture policies are valuable references for Indonesia in designing adaptive strategy.
Overall, this study reaffirms that the success of agricultural development in Indonesia will depend heavily on the country’s boldness in undertaking institutional reform, improving policy implementation at the local level, and ensuring adequate budgetary and regulatory support. With strong synergy among state actors, business entities, research institutions, and civil society, Indonesia holds tremendous potential to build a resilient, self-reliant, and equitable agricultural system that will become a central pillar of the national economy for generations to come.
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