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Why Indonesia Still Imports Rice Despite Vast Farmland: Lessons from Agricultural Technology

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Why Indonesia Still Imports Rice Despite Vast Farmland: Lessons from Agricultural Technology

Indonesia has one of the largest rice farmlands in the world, yet it still imports millions of tons of rice every year. Why does this happen, and what can we learn from neighboring countries like Thailand and Vietnam?

Agricultural technology in Indonesia

Introduction

Indonesia is blessed with fertile volcanic soil, abundant rainfall, and diverse rice varieties. Yet, it still struggles to meet domestic demand and must import rice every year. Meanwhile, Thailand and Vietnam — with smaller farmland — are among the world’s top rice exporters. The difference lies not in land quality, but in agricultural technology.

The Core Problem: Technology Gap

Two main issues hold Indonesia back:

  • Unstandardized Quality: Many farmers produce rice with inconsistent moisture levels, making it hard to store and sell at competitive prices.
  • High Production Costs: Producing rice in Indonesia can cost 2.5 times more than in Thailand, making it less competitive.

At the root of these problems is limited technology adoption. Only about 10% of Indonesian farmers use modern agricultural tools, according to a 2018 World Bank report. Most still rely on traditional drying, milling, and manual farming methods that reduce efficiency and increase waste.

How Other Countries Succeed

In countries like Vietnam and Thailand, farmers widely adopt modern rice milling units and mechanized farming systems. These machines can handle cleaning, sorting, grading, and packaging — ensuring consistent quality and reducing costs. As a result, they achieve higher yields, faster harvest cycles (up to 5 times a year), and better global competitiveness.

Case Study: Bank Mandiri’s Rice Milling Program

Fortunately, progress is happening. Since 2019, Bank Mandiri has supported thousands of Indonesian farmers by providing rice milling units and training. The initiative includes:

  • Rice milling units with 3-ton/hour capacity in Ciamis (West Java) and Kebumen (Central Java).
  • Facilities like offices, meeting halls, and shops for distribution.
  • Training programs covering pre-planting, planting, harvesting, and post-harvest processes.
  • Business models where farmers own shares and receive profit-sharing from milling operations.

The program has already reached more than 11,000 farmers, boosting collective income by Rp12.5 billion. Farmers also gained access to affordable Kredit Usaha Rakyat (KUR) loans, reducing reliance on loan sharks.

Benefits for Farmers

  1. Higher Prices: Selling rice instead of raw grain doubles or triples income per kilo.
  2. Ownership: Farmers participate as shareholders, not just workers.
  3. Training: Skills development ensures long-term sustainability.

What Indonesia Needs Going Forward

To truly compete, Indonesia must:

  • Expand access to modern agricultural technology nationwide.
  • Encourage public-private partnerships like Bank Mandiri’s program.
  • Train farmers in efficient farming and post-harvest practices.
  • Standardize rice production quality for global markets.
“The future of Indonesian agriculture depends not on land size, but on technology and efficiency.”

Conclusion

Indonesia has everything it takes to be a global rice powerhouse — fertile land, skilled farmers, and abundant water. What’s missing is widespread modernization. By embracing technology, empowering farmers with training, and expanding programs like rice milling units, Indonesia can reduce imports and even emerge as a strong rice exporter in the future.

What do you think? Can Indonesia bridge its agricultural technology gap? Share your thoughts below and spread this article to support local farmers!

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