2019 Indonesia’s Agriculture Development Plan

(Featured from the Policy No. 09/2018 of  The Minister of The National Development Planning)

2019 Indonesia’s Agriculture Development Plan

In May 2018 the Indonesian government released the 2019 work plan document (RKP) consisting of five National Priorities, namely:(1) Human Development through Poverty Reduction and Basic Service Improvement; (2) Reducing Inter-Regional Gaps through Strengthening Connectivity and Maritime Affairs; (3) Increasing the Added Value of Economy and Creation of Employment through Agriculture, Industry, Tourism, and Other Productive Services; (4) Strengthening Energy, Food and Water Resources Resilience; and (5) Stability of National Security and Success of Elections; compiled with a program-based budgeting approach (money follows program) and Thematic, Holistic, Integrative, and Spatial approaches (THIS). The RKP drafting process was completed through various coordination and consultation forums, both between Ministries/Government Institutions, non-ministerial government institutions, local governments, and other stakeholders. Overall, the 2019 RKP topics include the spectrum of national development planning, development themes and targets, national development priorities, field development, and implementation rules.

Three (3) sectors that make the biggest contribution to GDP in 2017 were the processing industry, the agricultural sector and trade. Since 2014 the role of the mining and excavating sector has gradually been taken over by the construction sector, which has gradually been able to grow above national growth. The agricultural sector was able to grow 3.8 percent (YoY) driven by the increase in the fisheries and forestry subsectors.

In the Agriculture Sector, 2019 growth is predicted 3.9-4.1% . This will be driven by:

  1. An increase in harvest index as a result of the construction of irrigated dry land;
  2. Focus on cultivation in the food subsector such as rice and corn; horticulture development for mango, banana, salacca zalacca, shallot, garlic and chili plants;
  3. increasing livestock (cow) production;
  4. Increasing fish cultivation production;
  5. Increasing shrimp production and exports;
  6. Increasing seaweed exports with high added value;
  7. The use of wood from industrial plantations other than for pulp production;
  8. Assessment of export policies for logs;
  9. increasing plantation productivity through plantation revitalization.

The processing industry sector is expected to grow between 5.1-5.6 percent, which will be stimulated by various measures and policies such as: (1) Providing incentives in the form of industrial gas prices and/or tax refunds for the industrial world; (2) Continuing efforts to debottleneck the regulation of ease of investment, certainty in the provision of land, and the provision of adequate electricity; (3) Market improvement and labor productivity; (4) Expansion of the metal industry to encourage related industries and improve the performance of the transportation equipment and electronic industries; (5) Increasing the downstreaming of industries and industrial activities outside Java along with the acceleration of cities’ industrial areas such as Konawe (metal), Palu (agro industry), Kuala Tanjung (Oleochemical), and Bintuni Bay (Petrochemical); (6) Increased production related to steel and iron along with the sustainability of infrastructure projects; (7) Trade facilitation for manufacturing exports and imports of raw / auxiliary materials and capital materials; (8) Increased investment in the manufacturing sector; (9) business practices of SMEs holding to be more efficient and competitive.

In accordance with the theme of the 2019 Government Work Plan, "equitable development for quality growth", domestically regional development in 2019 will be encouraged through increased productivity of sectors that are the main pillars of the regional economy, namely agriculture, forestry and fisheries, mining and excavation, processing industry, wholesale and retail trade and services. The increase in the contribution of these sectors is in line with continued development of strategic areas in several prime movers including Special Economic Zones (SEZ), Industrial Estates (KI), Urban Areas (megapolitan and metropolitan) , Tourism Areas and agriculture-based areas.

For anticipation, the Indonesian government believes that regulatory framework needed in the food and agriculture sector to support the achievement of Government Regulations on Increasing Production, Access and Quality of Food Consumption includes:

1) Priority Activities for Improving the Provision of Food from Agriculture and Fisheries: Draft Presidential Regulation on Accelerating the Finalization of Sustainable Rice Fields and the Control of Land Use Change of Rice Fields;

2) Priority Activities for Provision of Agriculture and Fisheries Infrastructure and Facilities: a) Draft Government Regulation on Financing the Agripreneurship and b) Draft Government Regulation on Quarantine Island.