Indonesia Agriculture Industry: Outlook and Potential

Indonesia’s fertile soils and diverse climate nourish a vibrant agricultural industry, positioning it as a global leader in tropical commodities and a land brimming with exciting opportunities.

In this series of Major Industries in Indonesia, we delve deep into the fascinating world of the agriculture industry in Indonesia, potential, regulations, and key players in this dynamic sector.

Also read: 7 Reasons and Advantages for Starting a Business in Indonesia

Indonesia Agriculture Industry Outlook

• Major Player: Indonesia ranks among the world’s top producers of palm oil, rubber, coffee, cocoa, and rice, contributing significantly to both domestic food security and export revenue.
• Shifting Landscape: While agriculture’s GDP share is declining due to industrialization, its crucial role in employing millions and ensuring food security remains paramount.
• Modernization Drive: Government initiatives and private sector investments aim to modernize practices, bolster productivity, and enhance sustainability.

Also read: 10 Reasons Why You Should Invest in Indonesia

Agriculture Business Opportunities in Indonesia

• Untapped Potential: Indonesia’s vast arable land and skilled workforce present enormous potential for growth in diverse areas like fruits, vegetables, spices, and processed food.
• Value-Added Processing: Expanding processing capabilities can increase product value, diversify exports, and create jobs.
• Tech-Enabled Solutions: Integrating technology like precision agriculture, e-commerce, and logistics can improve efficiency, transparency, and market access.

Also read: 25 Profitable Business Ideas and Opportunities in Indonesia

Potential Cities to Start an Agriculture Company in Indonesia

Choosing the best location for your agricultural venture depends heavily on your specific crop, target market, and desired resources. However, here are 5 diverse potential cities/areas across Indonesia with strong agricultural sectors:

1. Malang, East Java

   Home to the “Agro Techno Park,” promoting modern practices and high-value crops like apples, strawberries, and vegetables.

2. Makassar, South Sulawesi

   Bustling trade city with significant rice, cocoa, and coffee production, offering access to markets and infrastructure.

3. Medan, North Sumatra

   Major agricultural hub with diverse fruit, vegetable, and spice offerings, ideal for value-added processing ventures.

4. Padang, West Sumatra

   Trading hub with cassava, coconut, and coffee focus, suitable for integrating into established supply chains.

5. Batu, East Java

   Mountainous region with cool temperatures, perfect for specialty temperate fruits like strawberries and other niche products.

Also read: Top 11 Business Cities in Indonesia

Indonesia Agriculture Business Regulation

Recently, the Indonesian government implemented Regulation 5/2019 concerning Procedures for Business Licensing in the Agricultural Sector. This regulation aims to enhance the efficiency of obtaining business licenses in Indonesia by utilizing the Online Single Submission (OSS) system, an electronic platform for streamlined processing.

Regulation 5/2019 covers several key aspects, including:

• Classification of business licensing
• Requirements for business licensing
• Application fees for business licenses
• Supervision

Also read; Understanding Indonesia Business Law: A Comprehensive Guide

Leading Agriculture Companies in Indonesia

• Sinar Mas Agribusiness & Food: A major player in palm oil, rubber, and other commodities.
• Wilmar International: Global agribusiness giant with significant operations in Indonesia.
• PT Charoen Pokphand Indonesia: Leading provider of animal feed and poultry products.
• Japfa Comfeed: Key player in Indonesia’s poultry, cattle, and aquaculture sectors.

Also read:

• Top 10 Agriculture Companies in Indonesia
• Top Agritech Startups in Indonesia

How to Start an Agriculture Company in Indonesia

1. Conduct Market Research: Thoroughly research your chosen market, product, and regulations to assess feasibility and identify opportunities.
2. Develop a Business Plan: Create a comprehensive plan outlining your operations, financials, and long-term goals.
3. Seek Legal and Regulatory Guidance: Consult with experts to navigate legal requirements, business structure, and licensing procedures.
4. Build Partnerships: Collaborate with local farmers, distributors, and government agencies to overcome challenges and gain market access.

Also read: Can a Foreigner Own 100% of a Business in Indonesia?

By understanding the outlook, opportunities, regulations, and key players, you can cultivate a successful future in Indonesia’s dynamic agricultural landscape. Remember, thorough research, strategic planning, and building strong partnerships are crucial for thriving in this fertile ground of potential.

The Indonesian agriculture industry is a rapidly growing sector with a number of investment opportunities. If you are considering starting an agriculture business in Indonesia, there are a number of resources and support services available to help you get started.

InvestinAsia is among the companies that specialize in aiding you with Indonesia company incorporation. We boast a team of seasoned experts who can guide you throughout the process of:

• Foreign company / PMA registration in Indonesia
• Indonesia representative office registration
• Set Up PT PMDN Company
• Virtual office setup in Indonesia
• Business registration number in Indonesia
• Indonesian Business Licenses
• Indonesia Trademark Registration

If you are interested in starting an agriculture business in Indonesia, you can start by contacting us for FREE consultation.