Delima Hasri Azahari, a researcher at BRIN's Center for Industrial, Service, and Trade Economic Research, noted that the agriculture sector contributed 12.53 percent to Indonesia's gross domestic product in 2023 and absorbed 29.8 percent of the workforce as of February.
"It shows that this sector is not only a national economic foundation but also the main provider of jobs," Azahari said in a statement on Wednesday.
She explained that food security has an impact on maintaining inflation stability and that agricultural commodities, such as rice, red chilies, and shallots, play a vital role in maintaining inflation stability.
"This sector is also vital for food security, especially in providing sources of food, feed, fiber, and alternative fuel."
She said that in the agro-industrial trade, the value of agricultural exports reached US$52.9 billion, while the value of imports reached US$30.3 billion in 2023.
However, despite the major contribution, she assessed that Indonesia's agricultural sector is still facing several challenges, such as the poverty rate in rural areas in March, which stood at 11.8 percent, and the fact that 62 percent of farmers are small-scale.
Moreover, the sector contributes 13 percent to greenhouse gas emissions.
In fact, Indonesia's participation in the Global Value Chain (GVC) is 12.9 percent for forward participation and 10.1 percent for backward participation.
"It shows the importance of the agro-industry sector in global trade and the big potential for further growth," she remarked.
Therefore, she highlighted the importance of research and innovation in the agro-industry, which serve as keys to pushing Indonesia's economic development.
She noted that the benefits of agro-industry include added value, technological innovation, workforce absorption, and increased income for vulnerable groups.
Azahari also emphasized that the development of the agro-industry creates significant economic activities and enables developing countries to increase industrial production and manufacturing capacity.
She said that new technologies and innovations play an important role in increasing productivity and managing waste.
"Agro-industry development is a strategic step to achieve the 2045 Golden Indonesia vision," Azahari pointed out.
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Translator: Sean Filo, Raka Adji
Editor: Anton Santoso
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