Indonesia’s economy demonstrated impressive growth throughout 2022, recording 5.44% growth (year on year) in the second quarter of 2022.

This result aligns well with trends in economic recovery and is expected to continue in the years to come. The main strategy and relevant policies applied by the Indonesian Government include reducing restrictions on movement of people, preparing the economy to move to a ‘new normal’ era, and driving affordability by providing better-targeted subsidies and social welfare supports.

Indonesia’s agriculture, fisheries and forestry sectors have long been an integral part of the economy, with millions of hectares of arable land and extensive marine resources across the diverse archipelago. Although their contribution to Indonesia’s GDP has declined in the past years, these sectors remain critical as they employ about one-third of the workforce. Smallholder farmers throughout rural Indonesia have proven to be the backbone of the sector, particularly during the prolonged COVID-19 crisis.

Agriculture has been one of Indonesia’s most resilient sectors following the COVID-19 pandemic. Indonesia’s economy recovered gradually but unevenly across sectors. The positive performance of plantation commodities has supported the growth of the processing industry, especially the food and beverage industries. The global economic recovery is expected to boost Indonesia’s agricultural exports.

Digital transformation and infrastructure development are a focus for future economic growth, driven by the increasing middle-class population, the agenda for human capital development, geographic position and positive progress in free trade agreements.

Indonesia has implemented strategies to achieve the goals of the United Nations 2030 Agenda for Sustainable Development, especially Sustainable Development Goal 2: Zero Hunger. The 2020–2024 National Medium-Term Development Plan includes a renewed focus on enhancement of small and medium-size enterprises and improving economic investment climate, agricultural digital transformation, land and irrigated water management and improving the governance of the national food system.

Under its nationally determined contributions submitted to the Paris Agreement, Indonesia committed to reducing greenhouse gas emissions by up to 29% with national efforts, and up to 41% with international support. A significant amount of the reductions is to come from land-based systems.

To meet these commitments, Indonesia is working to enhance the use of new technologies in land management, increasing renewable technologies for energy generation and restoring degraded peatlands. All of these initiatives have been raised with ACIAR as areas of potential collaboration.

The Indonesian Government recently established a super agency, the National Institute for Research and Innovation (BRIN), which is an autonomous entity that will be responsible for research and development in all sectors. This significant reorganisation will transform the way we collaborate with Indonesia well into the future.

Country priorities

Feeding a nation of around 270 million people has been reasserted as a critical priority by the Indonesian Government. The prolonged pandemic had severe economic and non-economic impacts on the population and economy, including the agriculture, fisheries and forestry sectors. As most communities still rely on these sectors, Indonesia faces a complicated situation as the pandemic continues, with impacts on both food production and livelihoods. This is also a high-risk situation for food security due to the decrease in purchasing power and food supply chains.

In the second term of President Widodo’s administration (2019–24), agriculture has attained a higher strategic position, with line agencies tasked to achieve an advanced, modern and independent agricultural system. This has strong implications for ACIAR, as it is the first major reorientation of agricultural research priorities in Indonesia for a decade, and it is focused on both market linkages and alleviating poverty through improved family farming. While Indonesia retains a strong desire to sustain current research collaboration with ACIAR in the forestry, agriculture and fisheries sectors, our new short-term and medium-term priorities of significance include:

• creating a single integrated data system to district level
• strengthening the competitiveness of dedicated horticultural zones
• improving the production, value-add and competitiveness of export crops (especially cocoa, coffee, rubber, palm oil and tea)
• strengthening biosecurity
• driving the productivity and genetic quality of livestock
• the conservation and management of forestry agroecosystems (including peatland restoration and waste management)
• improving seed systems.

Indonesia is expecting a general and presidential election in February 2024. Regardless of the election outcome, it is expected that the focus on ensuring food security will remain a top priority for the country. This is consistent with the vision and mission of the national development planning agency, BAPPENAS, and the shared goals of BAPPENAS and ACIAR to transform the country’s agricultural innovation system.

The priority of the Ministry of Marine Affairs and Fisheries for 2021–24 is to maximise the revenue from the capture fisheries for small fishers’ welfare; improve the productivity of some export-oriented commodities, especially shrimp, lobster and seaweed, supported by appropriate research and development programs; and develop aquaculture villages across Indonesia.

The transition of the research and development function from technical government ministries to BRIN is progressing well and ACIAR continues to negotiate the transition of ongoing projects under the new arrangements. ACIAR is keen to refresh its partnership with technical ministries (such as the Ministry of Agriculture) to facilitate and ensure the Ministry’s involvement in future research collaborations.

In parallel, new and direct partnership with universities are also being established. Six new memorandums of understanding have been signed between ACIAR and the University of Gajahmada, Bogor Agricultural University, University of Udayana, University of Mataram, University of Diponegoro and University of Sam Ratulangi.

The change of the research and development landscape in Indonesia has significantly impacted the institutional capacity of ACIAR partners. ACIAR has identified the situation as an opportunity to contribute to rebuilding and enhancing capacity through the Institutional John Dillon Fellowship program in 2023, particularly for female researchers.

2023–24 research program

The research program addresses our high-level objectives, as outlined in the ACIAR 10-Year Strategy 2018–2027, as well as specific issues and opportunities identified by ACIAR and our partner organisations.

The following table lists ACIAR-supported projects active in Indonesia during 2023–24.

Current and proposed projects in Indonesia, 2023–24