Indonesia Advances Dual Strategy for Island Self-Sufficiency in Food and Energy, Boosts Agricultural Downstreaming

Indonesia's Ambitious Self-Sufficiency Drive

Indonesia is embarking on a dual-pronged national strategy to achieve comprehensive food and energy self-sufficiency across its vast archipelago, while simultaneously promoting agricultural downstreaming. This ambitious initiative is designed to bolster the nation's economy and food security, reduce reliance between islands, and significantly lower transport costs. President Prabowo Subianto has underscored that security and self-sufficiency in food, clean water, and energy are fundamental pillars for a sustainable future, setting a goal for Indonesia to be food self-sufficient within five years.

Fortifying Food Security and Production

A key figure in this endeavor is Minister of Agriculture Andi Amran Sulaiman, who recently met with President Prabowo Subianto to discuss the progress. The strategy places a strong emphasis on optimizing local food resilience, beginning with widespread cassava cultivation.

• Rice Production: Indonesia's rice output reached 33.1 million tons as of October, with projections to hit 34 million tons by year-end. Minister Sulaiman expressed optimism that Indonesia could cease rice imports within three months, thereby achieving full self-sufficiency.
• Regional Success: The island of Kalimantan has already demonstrated the effectiveness of this strategy by achieving rice self-sufficiency.
• Challenges: Despite increasing reserves, rice prices have risen beyond the government's highest retail price (HET), indicating market anomalies that require further scrutiny.
• Coastal Initiatives: Beyond staple crops, the government is also supporting programs like the Red and White Fishing Villages (KNMP) to strengthen food security and improve the welfare of coastal communities.

Advancing Energy Independence

The push for energy self-sufficiency is equally robust, with Minister of Energy and Mineral Resources Bahlil Lahadalia targeting 80 percent energy self-sufficiency by 2029. Efforts are concentrated on diversifying energy sources and reducing fossil fuel dependency.

• Biofuel Development: The government is actively promoting bioethanol production from local crops such as cassava. A significant step is the mandatory use of B40 biodiesel (a blend of 40 percent biofuel and 60 percent fossil diesel) implemented in 2025, with plans to increase this to B45 or B50 by 2026. The B50 program is specifically designed to end diesel imports by the second half of 2026.
• Renewable Energy Expansion: On January 20, 2025, President Prabowo inaugurated 37 strategic power projects totaling 3.2 gigawatts (GW) across 18 provinces, with 89 percent of the capacity sourced from renewable energy. This aligns with Indonesia's goal of reaching 23 percent renewable energy usage by 2025. The state electricity company PLN is also slated to build solar panels with a capacity of 80-100 GW.
• Ethanol Blends: The government plans to review the introduction of E10, a 10 percent ethanol blend in gasoline, to further reduce fuel imports. State-owned oil and gas company Pertamina already offers an E5 product, Pertamax Green 95.

Boosting Economic Value Through Agricultural Downstreaming

A critical component of Indonesia's strategy is the acceleration of downstream processing for key agricultural commodities. This aims to significantly boost economic value, create jobs, and improve farmer welfare by transforming raw materials into higher-value finished products.

• Coconut Transformation: Minister Sulaiman highlighted coconut as a prime example, estimating that converting raw coconuts into products like virgin coconut oil (VCO) could generate up to IDR 2,400 trillion (USD 144.7 billion) in revenue. Indonesia has declared it will no longer export raw coconuts.
• Investment and Job Creation: There is an investment opportunity of Rp 802.58 trillion (US$49 billion) in food downstreaming across 11 commodities, with an initial focus on seven, including garlic, cassava, palm oil, and coconut, attracting around Rp 406 trillion in investment. Cassava downstreaming alone is projected to absorb up to 1.45 million people into the workforce. The government has allocated Rp 371.6 trillion to strengthen this program.
• Diverse Commodities: Other commodities targeted for downstreaming include cocoa, cashew, gambier, nutmeg, and pepper, all aimed at adding value and creating new industrial opportunities.