Author: Ratih Dewanti-Hariyadi and Eko Hari Purnomo
Agriculture is an important sector in Indonesia because 50 percent of Indonesia’s population consists of farmers. However, the contribution of this sector to the Gross Domestic Product (GDP) is only 13.7% in 2008. This number was relatively constant in the last five years, from 2004 to 2008 (Central Bureau of Statistics, 2010). Of all the agricultural sub sectors, food crops are the main contributor to the GDP with a total share to the total agricultural sector of more than 50%. The minimum contribution of agricultural sector to total GDP and the large number of population working in the agricultural sector strongly indicates that the farmers are poor.
Most of foods produced in Indonesia are used to supply the domestic market and only a small percentage of them are exported. The percent share of agricultural sector to the total export value of the country is around 3%. According to the Central Bureau of statistics (2010), the main export of Indonesia is still dominated by manufacturing products (59%), oil and gas (20%), mining and others (18%).