Data from Universitas Gadjah Mada in 2020 revealed that Indonesia is home to 33 million farmers, yet only three per cent of them hold a university degree. Additionally, the Indonesia Central Bureau of Statistics reported that 73 per cent of workers in the agriculture sector have only completed elementary school. This data may contribute to the low levels of sustainable business orientation among local farmers in Indonesia.
The inadequate sustainable business orientation can affect the quality of local farmers. For instance, many farmers lack the motivation to professionalise their agribusiness, are unaware of how to maintain or scale their operations, and do not know how to increase productivity. Many Indonesian farmers rely solely on traditional practices passed down from their parents, treating farming as an inherited obligation rather than a profession.
This recurring cycle can create a never-ending loop that prevents the improvement of our farmers’ quality. It highlights the farmers’ unpreparedness to adopt and utilise modern technology.
Does agriculture really need technology?
The purpose of technology is to enhance efficiency and effectiveness in various activities. For example, Gojek allows users to easily order food, while Moka Pos assists small and medium businesses in managing inventory and accounting systems. In agriculture, platforms like Tanihub, Sayurbox, and Segari empower farmers by connecting them directly to consumers.
However, technology solutions like e-grocery address only one of the agriculture sector’s challenges—distribution. In reality, agriculture faces three fundamental issues: the farmers’ fixed mindset, low productivity, and unequal distribution.
Furthermore, startups such as Tanihub, Sayurbox, and Segari have not yet reached all areas of Indonesia or connected all farmers to end customers. This remains a significant problem. Many applications focus on digitising administrative and operational processes without necessarily improving productivity or product quality.
In contrast, fintech and edutech demonstrate how mobile applications can enhance security and speed in financial transactions and facilitate learning from anywhere. However, farmers do not primarily require apps that merely digitise administrative tasks; they need more profound solutions related to farming technology—such as biopore systems, microgreens, and more—to increase productivity. While leveraging mobile apps for customer engagement is useful, farmers need impactful technologies that go beyond just digitalising paperwork.
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One innovative startup, Habibi Garden, offers specific technologies like HabibiCooling, a high-pressure pump for cooling greenhouses, and HabibiClimate, a thermo-hygrometer. However, these solutions can be costly, making them unaffordable for many local farmers.
In Indonesia, 60 per cent of farmers are categorised as “gurem farmers” or “petani gurem,” meaning their land is less than 0.5 hectares—too small for sustainable commercial farming. This aligns with the fact that local farmers earn around 500,000 to 1 million rupiahs per month.
Therefore, AI technology and mobile apps are not suitable approaches for supporting local farmers. Before implementing such solutions, we must first shift farmers’ mindsets towards commercialisation in agribusiness.
Distribution systems: The second layer of agriculture’s challenges
As an archipelago nation with thousands of islands, Indonesia faces significant challenges in supply chain and logistics for distributing products, including agricultural goods. The distance is not the only issue; varying land contours, different climate conditions, and crime rates can also hinder transportation between provinces.
Indonesia has 10 designated food hub areas, such as South Sumatra, West Sumatra, Lampung, West Java, Central Java, East Java, South Sulawesi, West Nusa Tenggara, South Kalimantan, and Papua. However, some of these areas, like Bandar Lampung, face low food security due to inadequate distribution systems and accessibility.
For example, South Lampung is a key area for growing specific crops like chili, corn, and cabbage, located 40-50 minutes from Bandar Lampung. This centralisation can lead to supply shortages in several areas that do not cultivate these crops. If more farmers grew similar products, they could better meet local demand.
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Revolutionising local farmers’ perspectives is essential
The core issue affecting agriculture in Indonesia is the mindset and perspective of local farmers regarding agriculture as a sustainable business. Most view it merely as a way to produce commodities for income. However, agriculture has far greater potential. Local farmers often lack essential skills in leadership, project management, business orientation, marketing, and negotiation.
To address this, they need specific training and knowledge to help them perceive farming as a sustainable business rather than just a means of income. Although the government has launched various farmer education programs, these often have shortcomings that need to be addressed.
Ultimately, the Indonesian agriculture sector requires a shift in farmer mindsets regarding business practices rather than merely advanced technology. Supporting them with foundational knowledge and farming technologies like biopore systems, hydroponics, microgreen techniques or others is vital. Once this foundation is established, we can then focus on improving the distribution process, including third-party involvement.
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Image credit: Ministry of Finance Indonesia
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