Indonesia s Agricultural Rise: The Hidden Global Power Shifting 21st-Century Food Security and Productivity Rankings

Global Agricultural Performance and Indonesia’s Strategic Position in the 21st Century

Pudjiatmoko

Member of the Nanotechnology Technical Committee, National Standardization Agency, Indonesia

ABSTRACT

The global agricultural sector is experiencing rapid transformation driven by technological innovation, climate variability, demographic change, and evolving agrarian policies. Using recent data from the Food and Agriculture Organization (FAO) and the United States Department of Agriculture (USDA), this article examines the performance of leading agricultural countries and highlights the growing significance of Indonesia in the global food system. Particular emphasis is placed on Total Factor Productivity (TFP) as a critical indicator for assessing long-term agricultural efficiency and competitiveness. The analysis demonstrates that countries with high TFP—including Saudi Arabia and Kazakhstan—are able to achieve substantial productivity gains without proportional increases in land, labor, or other inputs. The article concludes by outlining policy implications for strengthening Indonesia’s agricultural resilience and innovation capacity.

1. INTRODUCTION

Agriculture remains a foundational sector for global food security, rural development, and economic stability. In recent decades, the sector has undergone profound changes driven by technological advancement, climate pressures, and increasing demand for sustainable production systems (FAO, 2017). As a result, evaluating agricultural performance requires not only an assessment of production volume but also a focus on efficiency, innovation, and environmental sustainability.

Total Factor Productivity (TFP), widely used in agricultural economics, provides a comprehensive measure of productivity gains attributable to technological progress, management improvements, and structural transformation (Fuglie, 2019). TFP has become essential for comparing agricultural performance across countries and for understanding long-term growth patterns in the global food system.

This paper analyzes countries with the most advanced agricultural sectors, drawing on FAO and USDA datasets. It also examines Indonesia’s position within this landscape, emphasizing the country’s potential to strengthen agricultural competitiveness through technological adoption and efficiency improvements.

2. GLOBAL AGRICULTURAL PERFORMANCE

Table 1 presents the top 10 countries based on the agricultural Total Factor Productivity (TFP) index, 2022 (USDA ERS International Agricultural Productivity dataset, 2015 base = 100).

Table 1. Top 10 Countries by Agricultural Sector

2.1 United States

The United States is globally recognized for its high agricultural output and advanced input-use efficiency. In 2023, the U.S. produced 103 million tons of cow’s milk and accounted for 42% of global corn output (FAO, 2024). High productivity levels are sustained through precision farming, biotechnology, and large-scale mechanization.

2.2 China

China remains the world’s largest producer of rice, wheat, and eggs. Its 2023 cereal production exceeded 1.6 billion tons, supported by extensive irrigation systems, hybrid varieties, and state-led agricultural modernization (Huang et al., 2021). Despite limited land resources, China has maintained strong productivity growth through continuous technological improvements.

2.3 Brazil

Brazil is a major global supplier of soybean, sugarcane, and livestock products. Its agribusiness strength stems from land expansion, investment in mechanized farming, and the development of high-yield crop varieties (da Silva & de Souza, 2020). The country accounted for 39% of global sugarcane production in 2023.

2.4 India

India dominates global dairy production, with output reaching 127 million tons in 2023. Wheat and rice production also contribute significantly to global supply. Productivity increases are closely linked to improvements in irrigation efficiency and the adoption of high-yielding seeds (Pingali, 2012).

2.5 European Union

The European Union maintains a highly efficient agricultural system supported by strong regulatory frameworks and advanced production technologies. Germany, France, and the Netherlands play central roles, with the EU producing 188 million tons of sugar beet in 2023 (European Commission, 2023).

2.6 Indonesia

Indonesia is the world’s leading producer of palm oil and an important exporter of cocoa and coffee. In 2023, the country’s palm oil production reached approximately 409 million tons. Agricultural modernization programs—including digital agriculture and mechanization—have contributed to improved productivity (Ministry of Agriculture Republic of Indonesia, 2023).

2.7 Australia

Australia’s agricultural sector excels despite its arid environment. Its success is supported by innovations in dryland agriculture, water-efficient irrigation, and climate-smart technologies (Mallawaarachchi & Foster, 2021).

2.8 Russia

Russia is the world’s largest wheat exporter, capturing 11% of global supply in 2023. Its competitive advantage stems from extensive arable land and significant investment in cereal production and export infrastructure (Rylko & Jolly, 2005).

3. TOTAL FACTOR PRODUCTIVITY (TFP) AND AGRICULTURAL EFFICIENCY

TFP offers a comprehensive measure of agricultural efficiency by quantifying improvements that arise not from additional inputs but from innovation, technological adoption, and better management practices (Fuglie & Rada, 2013). Countries with high TFP are capable of producing more with the same or fewer resources—an essential characteristic for achieving sustainable food systems.

Saudi Arabia and Kazakhstan are notable examples. Saudi Arabia’s TFP index reached 175.38 in 2022, driven by large-scale investments in vertical farming, controlled-environment agriculture, and advanced irrigation systems (USDA, 2022). Kazakhstan, with a TFP index of 131.59, has emerged as a regional leader in sustainable grain production, supported by vast land availability and improved production technologies.

TFP is widely recognized as a key indicator for long-term agricultural resilience. High TFP growth correlates with stronger food system stability, lower environmental pressure, and enhanced competitiveness (IFPRI, 2019; FAO, 2010).

4. DISCUSSION: INDONESIA’S STRATEGIC POSITION

Indonesia’s agricultural sector has continued to grow through expansion of mechanization, digitalization programs, and improvements in supply chain efficiency. However, Indonesia’s long-term competitiveness will increasingly depend on its ability to enhance TFP through intensified research, innovation, and private-sector participation in agricultural development.

Given that returns on investment in agricultural R&D range between 30% and 75% (Alston et al., 2020), increasing national investment in research institutions and innovation ecosystems is critical. Policies that strengthen intellectual property rights—while ensuring accessibility for smallholder farmers—are essential to promoting a sustainable, inclusive agricultural innovation system.

Indonesia’s strong performance in palm oil and cocoa demonstrates significant global relevance, yet diversification into high-value crops and advanced technologies will be necessary to maintain growth under increasing climate and market pressures.

5. CONCLUSION

Agricultural competitiveness in the 21st century is shaped not merely by land availability or input intensity but by technological capability, innovation, and resource-use efficiency. Countries such as the United States, China, Brazil, and the European Union continue to lead in production and innovation, while Saudi Arabia and Kazakhstan demonstrate the transformative impact of high TFP.

Indonesia’s position as a global agricultural player is strengthening, particularly in palm oil, cocoa, and coffee production. To sustain long-term growth, Indonesia must prioritize TFP enhancement through investment in agricultural R&D, digitalization, mechanization, and environmentally sustainable practices. Strengthening these areas will enable Indonesia to secure a more resilient and competitive agricultural future.

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Penulis : drh. Pudjiadmoko, Ph.D