Investing in data and innovation ecosystem to transform Indonesia’s agriculture



Agriculture is an important sector for Indonesia, contributes approximately 14 percent of the nation’s GDP, employs one-third of Indonesia’s labor force, and is dominated by smallholder farmers (93%). The sector is central to Indonesia’s capacity to nourish its growing and increasingly urbanized population with evolving food preferences. To meet those needs, it is essential to maintain and enhance agriculture’s productivity, sustainability, and competitiveness.

According to research by Mercy Corps and Rabo Foundation, the majority of farmers in Indonesia did not advance beyond primary school, are over 45 years old, and do not use the internet. The research also identified agriculture-specific digital solutions in Indonesia in 5 key areas: supply chain and data management, market access, digital financial services, digital information, and precision agriculture.

Digital agriculture has the potential to be a game-changer for agriculture in Indonesia and the country’s startup ecosystem has seen a rapid growth of AgTech or digital solutions for agriculture.  Indonesia’s startup ecosystem has seen particularly rapid growth in AgTech. In 2020, AgTech startups raised more than $165 million across 26 deals. Indonesian AgTech actors have helped advance many aspects of traditional agriculture and made important contributions to the needed transformation of the agriculture sector starting from production, supply chain, market access, and transaction to financing solutions. Unfortunately, smallholder farmers may not have the technical knowledge to keep up with agricultural mechanization and trends, resulting in low productivity.

Answering this challenge, AgTech actors such as MSMB Indonesia, Habibi Garden, and eFishery provide solutions for farmers to adopt the precision agriculture practice and Internet of Things (IoT), increasing the efficiency of the production of staple foods and other agriculture outputs.

With smart technology, eFishery has benefitted more than 15,000 farmers groups in 28 provinces and more than 400 cities/districts in Indonesia.

To support fairer pricing for farmers, and increase smallholder farmers’ income, AgTechs such as EdenFarm and TaniHub Group provide marketplace solutions and farmer support apps that help simplify the agricultural supply chain, increasing farmers’ incomes and stabilizing produce prices. Such solutions answer challenges of the absence of up-to-date marketing or pricing information, as well as a mismatch of food supply and demand.

TaniHub Group creates direct links between 50,000 crop farmers and over 100,000 buyers, securing a fairer price and reliable payment service while cutting the buyers’ cost. The Group has also supported more than 1,000 cultivation programs through its crowdfunding platform, TaniFund.

AgTech players provide end-to-end digital agriculture solutions that close information mismatches on supply and demand and offer traceability of agricultural products. With its tailor-made software and services for end-to-end business processes, Koltiva offers solutions that allow farmer groups and cooperatives to operate more efficiently and comprehensively with the availability of networks and necessary tools to conduct business activities.