- The general purpose of this study is to evaluate the role of
agriculture in Indonesia in supplying food to the country's economy.
Analysis of the general inter-relationship between the agricultural
and non-agricultural sectors of a developing, densely-populated economy,
and the sectorial interdependence viewed in relation to the
supply and demand for food during the development process, provides
a general framework of reference for the analysis of the food problems
The data originate from two basic sources: (1) Primary data
from the various institutions involved in and responsible for the food
economy in Indonesia. Much of these data were collected in Indonesia,
and in part they were an outgrowth of the writer's work there. (2)
Secondary data from published sources.
Use of the food balance sheet shows that the common pattern of
the Indonesian diet is characterized by a high starchy staple ratio and
staples, rice is the most important. Through a comparison of these
results with the nutritional standards calculated on the basis of methods
suggested by the Food and Agriculture Organization of the United
Nations, the nutritional status of the Indonesian people is evaluated.
By both qualitative and quantitative standards, the average diet of the
Indonesian people is poor.
Demand for food in Indonesia will increase significantly in the
near future, primarily due to the population and income effect. From
use of Okhawa's demand equation, major shifts are expected toward
the consumption of more rice and more protective foods. Any rise
in per capita income will bring strong pressure to increase the proportion
of starches that are supplied by rice.
To meet this growing demand, the need is to increase domestic
production rather than commercial imports. Trends in the production
of the six major farm food crops have been constructed and
analyzed for the period of 1950 - 1965. With the exception of groundnuts,
per capita production of these crops kept up with population
growth. However, for the main food item, rice, the rate of increase
of per capita production was lower than that of the per capita consumption.
This gap resulted in the importation of huge amounts of
Analysis of the conditions of food production leads to the
conclusion, that three factors are mainly responsible for the production
gap: First, the prevalence of disguised unemployment in the
food industry; second, the lack of adequate credit facilities and
capital in the rural areas; third, the lack of an efficient marketing
organization. Because of the inadequacies in these three important
aspects of the institutional framework, the process of adapting new
technologies and inputs to the production of food is slow.
Speed is crucial. In view of the population problem, the
longer the present trends are permitted to continue, the more difficult
it will be to close the production gap. Analysis of these three
factors leads to the following conclusions: (1) Industrialization is a
necessary condition for expanding food production and over-all
economic development, in order to absorb the surplus agricultural
labor force. (2) Marketing reform is needed to improve the institutional
framework in the producing areas, in order to maximize the
rate of growth of food production. This reform includes providing
adequate and efficient credit facilities, promoting competition in the
food market at the local level, and improving the infrastructure.