Strategy for Transforming Indonesian Agriculture

Traditionally, a major role of agriculture in Asia was to produce enough staple foods for food security through intensification of farming system. Today, however, agriculture is expected to contribute to multiple development goals. First, since wage rate h as been increasing in high performing Asian countries, including Indonesia, farm size expansion to introduce labor saving mechanization must be promoted to reduce production cost, particularly in rice farming. Second, considering increasing demand for palm oil and global concern with decreasing forest environment, achieving intensification of oil palm production without extensification is an urgent issue. Third, responding to increasing demand for high value agricultural products (HVPs), such as fresh fruit s and vegetables, for better nutrition and health, agricultural resources must be shifted to the production of these products. Fourth, considering that urban areas are excessively congested, rural areas must provide increased employment opportunities by pr omoting rural industrialization. Based on the literature review, this article proposes strategies (1) to maintain comparative advantage in rice farming, (2) to intensify oil palm production in a sustainable fashion, (3) to increase production of HVPs,and (4) to promote rural industrialization simultaneously in the context of Indonesia.