Development and Urbanization
Indonesia’s agricultural policy is at a crossroads. Agriculture has contributed to improving the welfare of tens of millions of Indonesians, achieving strengthening food security and bringing down the poverty rate (USD 1.9) from 70.3% to 8.3% in 2014. Since the global food crisis of 2007-08, however, it has increasingly become difficult to develop effective policy instruments for achieving food security and poverty reduction. Global forces to promote industrial agriculture with emphases on an economy of scale and efficiency have met with indigenous peoples’ resistance against land grabbing and welfare policy for small-scale farmers whose livelihoods and rights to land have been at odds with the logics of capital accumulation and state formation. This article is concerned about the changing role of agriculture in food security and poverty reduction in Indonesia. By taking a political economy approach, it addresses three important areas of agrarian change. First, it examines key structural changes in agriculture in the last decade including declining values of agriculture, urban population growth, commodity prices, shrinking size of farmlands, etc. Second, it presents a survey of current policy instruments—land titling, land redistribution, food estates, tariffs, and input and output subsidies—with an assessment of progress. Lastly, this article shows that policy innovations alone might be insufficient for food security and poverty reduction if they do not take into account impacts of large-scale agrarian transformation under the global corporate food regime.