Executive Summary
Indonesia’s agrifood system (AFS) has undergone a profound transformation over the past two decades, shaped by structural shifts in production, consumption, and policy. This paper analyzes the evolving structure and growth dynamics of Indonesia’s AFS using Input–Output data and comparative evidence from Bangladesh, Nigeria, and India. Three findings stand out. First, while rice remains politically central, its economic role has stagnated, leaving Indonesia caught in a “rice trap” of high prices, smallholder inefficiency, and heavy fiscal subsidies. Second, emerging drivers of dynamism—plantation crops, livestock, and dairy—demonstrate the growing importance of diversification, private sector investment, and off-farm value chains. Third, the Covid-19 shock revealed both resilience (in maize, roots, palm oil, and processed foods) and vulnerabilities (in rice, livestock, and imports of soybeans and dairy). The analysis shows that Indonesia’s future food security and rural prosperity depend on breaking free from the rice trap, rebalancing subsidies toward high-value crops and off-farm employment, and investing in infrastructure, cold chains, and institutional coordination. The paper concludes by outlining a research agenda for constructing an Indonesia-specific Agrifood System Social Accounting Matrix (AFS-SAM) better to quantify linkages, employment multipliers, and policy trade-offs.
