Indonesia’s new state farm company announced plans on Tuesday to invest 8 trillion rupiah ($479 million) by the end of next year.
This investment will focus on building production capacity through the acquisition of modern farm equipment and the expansion of rice mills, according to the chief executive of the company.
Agrinas Pangan Nusantara, a former state-owned construction services firm, was launched in May.
Investment strategy and goals
Its mission is to increase rice production, supporting President Prabowo Subianto’s goal of achieving self-sufficiency in the staple food for Indonesia.
The company’s objective is to establish 20 “food production centres” across the country by the close of 2026, Agrinas’ Chief Executive Joao Angelo De Sousa Mota was quoted by Reuters in a report.
Each of these centres will be outfitted with essential facilities, including grain dryers, rice mills, feedmills, and silos.
Mota stated the company plans to secure 225,000 hectares (556,000 acres) of land from the agriculture ministry by year-end.
To utilise this land, the company intends to either collaborate with small farmers by renting them equipment or establish its own farms.
“When we invest using state money, we have to calculate how to make this system work and succeed,” Mota added.
He stated the investment would amount to eight trillion rupiah, which is equivalent to $479 million.
Mota, a longtime friend of Prabowo, said the company aims to increase its annual rice output capacity to 4 million metric tons.
This target represents a significant increase compared to the total national output of 30.6 million tons in 2024.
Modernising agriculture
He also stated that a 400-billion-rupiah production center is already under development on 12,000 hectares (approximately 30,000 acres) of military-owned land in Baturaja, South Sumatra.
The new initiative will focus on cultivating rice and corn, utilising modern farming technologies commonly employed globally but currently underutilised in Indonesia.
The new agricultural equipment to be implemented includes larger, custom-designed machinery sourced from India’s Mahindra Group, according to the report.
This specialised equipment is anticipated to significantly enhance efficiency, being specifically engineered to optimise performance in the unique conditions of Indonesian soil.
In addition to these advanced machines, the initiative will also incorporate cutting-edge technological tools such as drones for precise and efficient fertiliser spraying.
Furthermore, satellite monitoring equipment will be utilized to provide comprehensive oversight and analysis, ensuring more effective management of agricultural operations.
Mota stated that Agrinas Pangan aimed to boost national farming productivity by replacing manual labor with machinery.
Mota said:
European and American farmers are prosperous because one family can manage thousands of hectares of land.
Agrinas Pangan recently received a 700 billion rupiah ($42 million) capital injection from its parent company, Danantara Indonesia, a sovereign wealth fund.
The company plans to secure bank loans to cover its remaining capital expenditure, according to Mota.
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