Indonesia-Development Trends AGRICULTURE

During the 1970s and 1980s, Indonesia followed a wellrecognized trend among developing nations: a decline in agricultural production as a share of GDP. The agricultural sector, however, was still vital for several reasons. The vast majority of people lived and worked in rural areas, and most of their income was from agricultural activities. Rice, which dominated agricultural production in Indonesia, was the staple food for most households, urban and rural alike. The government considered adequate supplies of affordable rice necessary to avoid political instability. The New Order's most striking accomplishment in agriculture was the introduction of so-called Green Revolution rice technology, which moved Indonesia from being a major rice importer in the 1970s to self-sufficiency by the mid-1980s.

The 1980 population census indicated that 78 percent of the population was located in rural areas (see Population , ch. 2). This share continued to decline during the 1980s, but for a country at Indonesia's level of development, urbanization proceeded slowly. While agriculture contributed a decreasing share of GDP--falling from 25 percent in 1978 to 20.6 percent in 1989--about 41 million workers, or 55 percent of the total labor force in 1989, still found employment in the agricultural sector. Within the agriculture sector, food crops accounted for 62 percent of the value of production, tree crops for 16 percent, livestock for 10 percent, and fisheries and forestry equally for the remaining 12 percent of agricultural production in 1988 (see fig. 7; table 23; table 24, Appendix).

Data as of November 1992

Figure 7. Major Crop Production, 1992

Development Trends

During the 1970s and 1980s, Indonesia followed a wellrecognized trend among developing nations: a decline in agricultural production as a share of GDP. The agricultural sector, however, was still vital for several reasons. The vast majority of people lived and worked in rural areas, and most of their income was from agricultural activities. Rice, which dominated agricultural production in Indonesia, was the staple food for most households, urban and rural alike. The government considered adequate supplies of affordable rice necessary to avoid political instability. The New Order's most striking accomplishment in agriculture was the introduction of so-called Green Revolution rice technology, which moved Indonesia from being a major rice importer in the 1970s to self-sufficiency by the mid-1980s.

The 1980 population census indicated that 78 percent of the population was located in rural areas (see Population , ch. 2). This share continued to decline during the 1980s, but for a country at Indonesia's level of development, urbanization proceeded slowly. While agriculture contributed a decreasing share of GDP--falling from 25 percent in 1978 to 20.6 percent in 1989--about 41 million workers, or 55 percent of the total labor force in 1989, still found employment in the agricultural sector. Within the agriculture sector, food crops accounted for 62 percent of the value of production, tree crops for 16 percent, livestock for 10 percent, and fisheries and forestry equally for the remaining 12 percent of agricultural production in 1988 (see fig. 7; table 23; table 24, Appendix).

Data as of November 1992