JAKARTA Professor of the Faculty of Economics and Management of IPB University, Prof. Dr. Sahara, emphasized the importance of transforming the national food system to maintain Indonesia's resilience and sovereignty amid increasingly complex global disruptions.
According to him, various international dynamics such as geopolitical conflicts, supply chain disruption, and the protectionism policy of developed countries have put great pressure on Indonesia's food system.
"The transformation of the food system cannot be postponed any longer. This is a key strategy to strengthen our competitiveness, economic independence, and food security," said Prof. Sahara in a written statement, Sunday, June 15.
He highlighted that the contribution of the primary agricultural sector to Gross Domestic Product (GDP) continued to decline, from 24% in 1982 to around 12% in 2023, although this sector still absorbs 28% of the national workforce.
The decline in GDP share was not followed by a significant decrease in employment. This indicates that industrialization is not yet optimal, and the agricultural sector has not experienced an innovation-based productivity leap," he explained.
Furthermore, Prof. Sahara revealed that the growth of the total factor productivity (TFP) of the agricultural sector is still low, ranging from -2.18% to 3.53%. Agricultural output is still largely supported by land expansion, not by technological advances. This should be a concern," he added.
He also mentioned the impact of international trade policies, such as retaliatory rates between the United States, China, and Canada, which have an impact on reducing global trade volume and a surge in international food prices.
In his presentation, Prof. Sahara highlighted the phenomenon of smile curves in the food system, where the creation of the highest value is concentrated in the upstream research sector and distribution downstream, while farmers actually get the lowest margin.
"This creates inequality in the food value chain. On-farm activities that become the backbone of production actually receive the smallest yield," he said.
For this reason, Prof. Sahara emphasized the need for a comprehensive and integrated food system transformation. He mentioned the five main pillars that must be the focus of national policy, namely the integration of the agricultural sector with industry and services through technological innovation, human resource development and institutions, infrastructure improvement, inclusive access to financing, and strengthening international trade resilience.
"The five pillars must be strengthened by inter-regional connectivity strategies, downstream agricultural products with high added value, and sustainable agricultural practices," he explained.
Prof. Sahara believes that Indonesia has all the potential to become a great force in the global food system, but it takes political will and cross-sectoral synergy to make it happen.
"With the wealth of natural resources and a strong agrarian heritage, we should not depend on food imports. Indonesia must build a food system that is independent, fair, and sovereign," he said.
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He also encouraged the government to be more serious in investing in research, empowering farmers, and protecting food sector players from external shocks.
The transformation of the food system is the foundation for the nation's future. If this is not done, we will continue to depend and be vulnerable to the global crisis," concluded Prof. Sahara.
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