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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.
Keywords: Global agriculture, Total Factor Productivity (TFP), agricultural efficiency, food security, technological innovation, climate resilience, Indonesia agriculture, productivity growth.
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
|
Country |
Main
Production |
2023
Production (Million Tons) |
USDA
TFP Index 2022 |
|
United States |
Corn, cow milk, meat |
103 (milk), 1.21 billion (corn) |
100.609 |
|
China |
Rice, wheat, eggs |
1.6 billion (rice & wheat),
64% (global eggs) |
113.777 |
|
Brazil |
Palm oil, soybean, sugarcane |
409 (palm oil), 39% (global
sugarcane) |
96.594 |
|
India |
Wheat, rice, cow milk |
127 (milk), 26% (global rice
& wheat) |
112.342 |
|
European Union |
Cow milk, sugar beet |
34 (Germany milk), 188 (sugar
beet) |
107.352 |
|
Indonesia |
Palm oil, cocoa, coffee |
409 (palm oil) |
107.352 |
|
Australia |
Wheat, beef |
199 (global wheat) |
110.689 |
|
Russia |
Wheat, barley |
11% (global wheat) |
113.150 |
|
Saudi Arabia |
Vertical farming |
- |
175.382 |
|
Kazakhstan |
Wheat, grains |
– |
131.592 |
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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#Agriculture
#TFP
#Indonesia
#FoodSecurity
#Innovation
