Indonesia’s recent economic progress has been impressive, having almost doubled its GDP from 2001 to 2012 and reduced poverty levels by roughly half. However, Indonesia’s prospects for securing growth at past levels are not certain. Growth has slowed and the risk that it could fall further is real … Low growth means the poor will find it harder to escape poverty …As nearly two thirds of Indonesia’s poor live in rural areas, [Australia] will continue to focus on the development of the agricultural sector. We will encourage inclusive economic growth by strengthening the operation of agricultural markets, improving food security, raising agricultural productivity, and helping to boost poor farmers’ incomes and employment by addressing constraints such as access to loans. We will also increasingly look to better connect implementation programs with policy dimensions and facilitate private sector-led investment in better agricultural practices and services.
—Aid Investment Plan, Indonesia, 2015–16 to 2018–19 (DFAT)
Indonesia is an archipelago of 13,466 islands, with an enormous population of more than 258 million people. It is the world’s third largest democracy, with the world’s largest Muslim population. It is the largest economy in South-east Asia and the 16th largest economy in the world.
Indonesia’s economy has steadily grown in recent years. It has reached middle income status and achieved substantial development progress. However, economic growth is now slowing and inequality is rising. At least 100 million people in Indonesia live on $2 or less per day. Slow growth makes it difficult for Indonesia to meet its development goals, or for the poor to escape poverty.
Strengthening agriculture, including the crop, livestock, forestry, marine fisheries and aquaculture sectors, is critical to reduce poverty and develop equity.
Indonesia is one of Australia’s most important bilateral relationships due to its strategic position and its influence in the region. Both countries can work together for their mutual benefit.
Australia is an excellent position to help Indonesia tackle common problems through agricultural research partnership.
ACIAR has collaborated with Indonesia for 35 years. This longstanding partnership has benefited farmers and agriculture through the development of technologies and innovations.
ACIAR programs reached some of the poorer regions in Aceh, Nusa Tenggara Barat, Nusa Tenggara Timur, and Central Sulawesi, as well as developed provinces in Java, Bali and Sumatera. This diversity gives the program flexibility to improve livelihoods using alternative approaches, including ensuring food and nutritional security through enhanced productivity and quality, and improving market linkages for high-value products from smallholders.
The Government of Indonesia places high priority on agriculture and fisheries. These broad sectors include, but are not limited to: crops, livestock, forestry, marine fisheries and aquaculture. These sub-sectors are critical to reducing poverty, improving food security, and empowering women and girls.
The Indonesian Government defined nine priority areas for development across all sectors. The five main ones are:
- ensuring food security and achieving self-sufficiency in key commodities, including developing policy to support export commodities, substituting imports and producing bio-energy raw materials;
- making agricultural products more competitive;
- developing infrastructure and agro-industry in villages;
- protecting farmers by appropriate regulation and subsidies; and
- improving governance.
Fisheries and forestry are also important. The Indonesian Government’s priority areas include improving the welfare of farmers and fishers, disseminating innovation and technology, adapting to and mitigating climate change, rehabilitating peatland and managing fire.
ACIAR works with Indonesia to define research priorities and implement programs and projects. Research users help to develop projects, embed activities within value chains and at the farming-community level, and to link researchers with stakeholders, including farmers, the private sector, non-government organisations (NGOs), extension services and policymakers. While the program emphasises implementation of research through institutional partnerships, ACIAR also supports the longer-term sustainability of research outcomes through individual capacity building and institutional development.