- Indonesia prioritizes agricultural industrialization to strengthen competitiveness and escape the middle-income trap.
- Karnavian references New Zealand and South Korea as successful agricultural transformation examples.
- Industrializing farming builds resilience, generates jobs, boosts exports, and supports inclusive growth.
Indonesia's Minister of Home Affairs Tito Karnavian emphasized that industrializing agriculture and farming is crucial for improving value and competitiveness, strengthening Indonesia’s agricultural exports, and helping the nation overcome the middle-income trap.
He made the statements at a coordination meeting regarding the downstreaming of key agricultural products on Monday. He stated that the answer is not only in production but also boosting value-added agriculture in Indonesia, which can enhance the value of food items.
Using New Zealand as a reference, Karnavian emphasized how the nation has enhanced its citizens' welfare through agriculture, even in the absence of significant manufacturing industries such as automobiles, electronics, or advanced technology sectors.
He mentioned that the nation possesses plentiful natural resources such as gold, copper, and coal, which function as strategic reserves. "The population is 5 million. When I was studying there in 1998, there were 3 million people. The sheep, 70 million. Dozens of millions of cows. Dozens of millions of deers," he said.
Karnavian characterized agricultural industrialization as the transformation of agricultural and farming products into high-quality final goods, referencing South Korea's achievement in converting ginseng into health products for export.
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He noted that Indonesia possesses a significantly wider range of plants, spices, and agricultural products than numerous countries, presenting a vast opportunity for downstreaming. He stated that this potential can be optimized through professional marketing and packaging design.
He believes that industrializing agriculture would enhance food resilience, generate employment, boost export income, and promote inclusive economic development.
He mentioned President Prabowo Subianto’s focus on food self-sufficiency as a national priority, supported by Rp371 trillion (approximately US$24 billion) in funding. Regional leaders must not only concentrate on raw materials, but also play a role in the food processing sector to enhance Indonesia's competitiveness in the global market, he stated.
The government sees agriculture industrialization as a key pillar of Indonesia’s middle-income strategy, ensuring that farmers benefit from rising productivity while the nation captures greater value from its natural wealth.