8.6 Strategic planning to improve Indonesian bioeconomy
Strategic Opportunities Programme for the Republic of Indonesia – 2023–2027
The Republic of Indonesia’s Country Strategic Opportunities Programme (COSOP) for 2023-2027 focuses on addressing key challenges and opportunities within the country. Indonesia is a rapidly growing middle-income nation with a substantial population of 270 million. While significant progress has been made in reducing national poverty to 9 percent, rural areas still experience higher poverty rates, particularly in eastern Indonesia. Agriculture remains the primary source of income for 64 percent of impoverished rural households, mostly smallholder farmers with limited access to essential services. The shift of young people away from the agricultural sector poses a hurdle to rural development. The COSOP aims to identify new economic opportunities for youth engagement and modernizing the agriculture-based sector, including catering to urban food demand and fostering innovative partnerships between agribusinesses and smallholders.
The current government has recognized the transformation of food systems as a national priority, with a target of doubling agriculture productivity and income by 2030. Decentralization is another key focus, aiming to enhance service delivery at the local level. The inclusive transformation of food systems is the main objective of the COSOP, which aims to increase the food and nutrition security of rural women and men while enabling them to achieve lucrative, resilient, and sustainable livelihoods. This entails making certain that, as mentioned in the first strategic objective, rural small-scale producers safeguard natural resources, produce a consistent income, and support food security and nutrition. Ensuring that institutions and organisations, ranging from local to national levels, offer high-quality services that cater to the needs of rural communities is the second strategic goal.
IFAD projects within the COSOP will primarily target various groups, including smallholder households heavily reliant on farming, land-poor households, landless rural individuals, and unemployed or underemployed women and youth. These projects will prioritize gender equality, women’s economic empowerment, economic opportunities for young women and men, and active participation of women and youth in decision-making roles. To achieve these strategic objectives, the COSOP will promote food systems transformation in marginalized areas, encompassing both existing and new projects. This will include scaling up successful projects through additional financing and engaging in co-financing with other international financial institutions. Notably, grants will predominantly focus on the sustainable management of peatland ecosystems. The main implementation risk identified is the presence of weak project implementation capacity. However, this risk will be mitigated through capacity-building efforts and the establishment of support service delivery units, ensuring the effective execution of the COSOP’s objectives.