Indonesian farming sector seen contributing more to growth
The farming sector is contributing more to economic growth despite having less manpower, according to the National Development Planning Board (Bappenas) said recently.
The sector is one of the major drivers of Indonesia’s economic growth, contributing 0.5 per cent in the first and second quarters this year, according to the Central Statistics Agency (BPS). The percentage rose slightly compared to the same period a year earlier, when the farming sector contributed 0.4 per cent.
The increase was achieved with less manpower as farmers now account for 36.5 per cent of Indonesia’s total labour of 110 million, lower than its 2011 figure of 38 per cent.
“This is a good sign. It shows that our farming sector is becoming more productive,” the planning board’s chief, Armida Alisjahbana, said recently.
Alisjahbana said that among the factors that made the agriculture sector more productive was an improvement in infrastructure and easier access to high-quality seeds. “We will coordinate with the Agriculture Ministry and take several strategic steps to boost productivity further,” she said.
She expressed optimism that the shift of labour from the farming sector to other sectors, such as manufacturing and services, would not disrupt Indonesia’s food sustainability. “It [the shift of labour] is good for Indonesia because we currently have a labour surplus in the farming sector,” Alisjahbana explained.
Such a shift of labour should be considered positively by policymakers as it would also translate into higher income, boosting people’s purchasing power as well as driving economic growth, said Gadjah Mada University economist Tony Prasetiantono.
“The farming sector has relatively low pay. Hence, fewer people working in farms means they have now moved to a value-added industry, which has bigger salaries and promises better welfare,” he said.
However, Prasetiantono added that the declining number of Indonesians working in the farming industry must be compensated with better farming productivity.
Indonesia allocated 13.2 million hectares of land for rice fields in 2011, according to BPS data. This size has stayed relatively the same over the past five years, growing a slight 9 per cent from its 2007 figure of 12.1 million hectares.
