RRI.CO.ID, Jakarta — As global agricultural markets brace for a decade of intense volatility and rising input costs, Indonesia is actively cushioning its agricultural sector to secure stable farm incomes. The country's proactive policies serve as a localized shield against the economic vulnerabilities highlighted in a newly released international outlook.

According to the latest OECD-FAO Agricultural Outlook 2026-2035, the global average gross agricultural income per worker is projected to rise by 9 percent by 2035, driven by productivity enhancements. However, according to the Food and Agriculture Organization (FAO) and the Organisation for Economic Co-operation and Development (OECD) in their report on Monday, June 29, 2026, this growth remains highly fragile.

FAO and OECD warned that if recent market shocks and conflicts persist, there is a 25 percent probability that farm incomes in 2035 will fall below current levels. A major catalyst for this risk is energy price volatility, which drives up fertilizer costs and threatens to squeeze smallholder farmers who lack the financial capacity to absorb such shocks.

With Southeast Asia projected to drive 39 percent of global food consumption growth by 2035, domestic stability in the region is more critical than ever. Recognizing these global volatility risks, Indonesia has implemented strategic market interventions aimed at stabilizing farm incomes and curbing the impacts of soaring production costs.

Central to Indonesia's defense strategy is the government’s decision to maintain the Government Purchasing Price (HPP) for unhusked rice (gabah) at Rp6,500 per kilogram. This policy has drawn strong praise from the Association of Indonesian Regency Councils (ADKASI). During a meeting with Agriculture Minister Andi Amran Sulaiman in Jakarta on Monday, June 29, 2026, ADKASI Chairman Siswanto emphasized that the price floor successfully balances farm profitability with consumer affordability.

"The current price of unhusked rice is at a sweet spot. Farmers are earning a decent profit, while retail rice prices remain controlled," Siswanto stated, adding that guaranteed income security is even encouraging younger generations to return to the agricultural sector.

Beyond price stabilization, Indonesia is directly addressing the exact vulnerability highlighted by the FAO: the threat of rising input costs. While the OECD-FAO report noted that high energy and fertilizer prices could cause sharp declines in grain production in lower-income countries by 2027, Indonesia has counteracted this by streamlining the distribution of subsidized fertilizers. ADKASI reported that recent reforms have made fertilizers significantly cheaper and easier to access for local farmers across various regions.

Agriculture Minister, Andi Amran Sulaiman, reiterated that the ultimate metric of the nation's agricultural success is the welfare of its farmers. By safeguarding profitable selling prices and reducing production costs, the government aims to insulate smallholders from the whims of international market shocks.

"Food security programs cannot be achieved by the central government alone," Minister Amran said, noting that cooperation between local governments, farmers, and the private sector is crucial. "With everyone moving together, I am optimistic we can achieve food self-sufficiency in line with President Prabowo's directives."

While the OECD-FAO report notes that projected global productivity gains will benefit consumers by lowering real commodity prices, it warns that these same declining prices will pressure smallholder farmers who lack the capital to adopt advanced technologies. By actively combining localized price protections with structural support, Indonesia is attempting to look beyond production figures and proactively shield vulnerable smallholders through enhanced market access and tailored safety nets.