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Country profile - Indonesia


The tsunami of 26 December 2004 destroyed entire communities around the Indian Ocean. Not surprisingly, those closest to the earthquake that spawned the wave were the hardest hit. Of the 289,000 people listed as dead or missing five weeks later, 236,000, or 82 per cent, had lived in Aceh, the Indonesian province at the northern tip of Sumatra. Some 800,000 of Aceh's pre-tsunami population of 3.9 million required food aid, and the situation is all the more dire as the province has endured decades of separatist strife.

Property losses have been extensive, with agriculture badly affected. The United Nations' Food and Agriculture Organization (FAO) estimated that 40,000 ha of agricultural land in Indonesia was devastated as rushing seawater destroyed rice crops, wrecked irrigation and drainage infrastructure, and fouled fields and wells with salt. Livestock losses were 20,000 head of cattle and buffalo, an equal number of small ruminants and 2.5 million poultry. Feed, fodder and pasturage for surviving livestock were ruined. More than 24,000 ha of coastal mangrove forest and a third of Aceh's offshore coral reefs have been affected, causing unknown harm to fisheries.

However, the tsunami left unscathed the rest of Indonesia, which occupies an archipelago of 17,000 islands that stretch as far as London is from Moscow. The country's economic growth forecast for 2005 remains a robust 5.5 per cent.

Spice Islands

Historically, Indonesia was known for the spices grown exclusively in the Spice Islands, or Moluccas - now Maluku Province. Cloves, which were traded in the Middle East as early as 4,000 years ago, were the primary incentive for European maritime exploration in the 15th century. By this time, Muslim sultanates had displaced, except on Bali, the Buddhist and Hindu kingdoms that had vied for supremacy on the islands since the 7th century. In the 17th century, Indonesia came under European colonial rule, first Portuguese then Dutch, and colonists found the tropical climate and volcanic soils ideal for such crops as sugar, coffee and rubber.

At the end of three years of Japanese occupation during the Second World War, Indonesians declared their independence, which the Netherlands finally accepted four tumultuous years later in 1949.

Today, rice is the main staple crop, but cassava, maize, fruit, sweet potatoes and vegetables are also important. Some 40 per cent of domestic food supplies come from home gardens managed by women, which also provide a fifth of household income. Cash crops include cocoa, coffee, copra, palm oil, groundnuts, rubber, soybeans, sugar, tea and tobacco. Animal husbandry and fishing make small but valuable contributions to the agricultural sector, which supports half of the population.

Indonesian agricultural policy since 1967 has focused on achieving food self-sufficiency. As rice provides more than half of all calories consumed, self-sufficiency in this staple grain became the national goal, despite the country's limited endowment of suitable land, a condition that has kept the central island of Java, by far Indonesia's most populous, a rice importer since the 16th century.

Quixotic quest

For most of the 20th century, Dutch and Indonesian administrations strove to ameliorate rural poverty with what proved to be ill-conceived and badly supported transmigration programmes that moved families from crowded provinces such as Central Java to thinly populated areas, especially on Sumatra and Kalimantan. In the mid-1990s, the government launched its Mega Rice Project, which aimed to turn Central Kalimantan Province into a rice bowl by logging and draining 1 million ha of rainforest peatland and planting it with rice. (Peat covers 20 million ha in Indonesia, or 11 per cent of its land area.)

Nearly 5,000 km of canals drained water from the peatland but proved unable to irrigate it in the dry season. When the 1997 El Niño brought a severe, eight-month drought, the peat went up in smoke, creating a cloud of noxious yellow haze that choked 15 million sq km, affecting human health and economic welfare in Indonesia, Malaysia, Singapore, Brunei and Thailand.

Meanwhile, the Asian financial crisis that began in 1997 caused Indonesia's gross domestic product to plunge the following year by 13 per cent and inflation to balloon to nearly 60 per cent. The percentage of Indonesians living in absolute poverty more than doubled to a quarter of the population. Popular discontent brought to an end 32 years of authoritarian rule under President Suharto in May 1998, and 2004 saw the country's first-ever direct presidential election.

Aerial photograph showing how sea water has damaged nurseries, paddy fields (© FAO)
Aerial photograph showing how sea water has damaged nurseries, paddy fields

The tsunami disaster brought together in January Indonesian academics and government officials, and representatives of regional aid and development agencies including members of the Consultative Group on International Agricultural Research. At a meeting in Bogor, a recovery and improvement programme for Aceh's livestock sector received priority attention. The proposed introduction of salt-tolerant rice varieties was weighed against the economically attractive option of replanting damaged paddy area with such cash crops as oil palm. Similarly, participants questioned the advisability of fully restoring fisheries in areas where fish stocks were overexploited before the tsunami.

Indonesia has suffered from poor governance, corruption, environmental damage and now the tsunami, but it remains a country with natural resources, including oil, and a resourceful people. It has the potential to continue to be a major supplier of agricultural commodities.

Statistical information
  • Country: Republic of Indonesia
  • Capital: Jakarta
  • Area: 1,919,440 sq km (total), 1,826,440 sq km (land), 93,000 sq km (water)
  • Population: 238.5 million
  • Languages: Bahasa Indonesia (official, modified form of Malay), English, Dutch and more than 583 local dialects, the most widely spoken of which is Javanese
  • Life expectancy: 72 for women, 67 for men
  • GDP: purchasing power parity $758.8 billion (2003 est.)
  • GDP per capita: purchasing power parity $3,200 (2003 est.)
  • GDP composition by sector: agriculture 16.6%, industry 43.6%, services 39.9% (2003 est.)
  • Major industries: petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food, tourism
  • Natural resources: petroleum, tin, natural gas, nickel, timber, bauxite, copper, fertile soils, coal, gold, silver
  • Agricultural products: rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra, poultry, beef, pork, eggs
  • Export commodities: oil and gas, electrical appliances, plywood, textiles, rubber
  • Major export partners: Japan 22.3%, US 12.1%, Singapore 8.9%, South Korea 7.1%, China 6.2% (2003)
  • Land use:arable land 11.32%, permanent crops 7.23%, other 81.45% (2001)

Date published: March 2005


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