Why Australia and Indonesia Must Deepen Agricultural Cooperation
- Geneveive Donnellon-May
- 2 hours ago
- 5 min read
In a world of fractured supply chains and rising geopolitical tension, agricultural cooperation is quickly becoming one of the most urgent—and overlooked—pillars of Australia–Indonesia cooperation.
With a population exceeding 280 million and diets shifting toward protein-rich and processed foods, Australia’s scale, geographical location and agricultural expertise make it an obvious partner in safeguarding the region’s food future. Strengthening this partnership is no longer just an economic opportunity—it is a strategic imperative.
Despite sustained policy efforts to boost self-sufficiency, Indonesia’s food demand currently continues to outpace domestic supply in several key categories, particularly in meat, wheat, soybeans, beef and animal feed. Reflecting this imbalance, Indonesia’s imports of fresh and processed agricultural products reached US$29.6 billion in 2024, up from more than US$28 billion in 2022.
Australia plays a crucial role in meeting Indonesia’s rising food demand. As the country’s third-largest agricultural supplier after Brazil and China, it accounts for roughly 12–13 percent of imports. In 2024, two-way trade reached A$5.5 billion with Australian exports of grains and livestock both stabilising Indonesia’s domestic supply and shielding it from global market shocks, while simultaneously supporting rural economies at home.
This interdependence is strengthened by complementary strengths: Australia contributes scale, arable land and advanced farming systems, while Indonesia offers a large and growing market, alongside opportunities for reciprocal trade in tropical and value-added agricultural products.
As food demand in Indonesia continues to rise—driven by population growth, expanding middle classes and shifting diets toward more protein-intensive consumption—there is a strong case for deeper Australia–Indonesia cooperation.
Some progress has already been made. The Indonesia–Australia Comprehensive Economic Partnership Agreement (IA-CEPA), in force since 2020, eliminated or reduced tariffs on over 99 percent of Australian agricultural exports, ensuring preferential access for key staples such as wheat, beef, dairy and feed grains.
The effectiveness can already be seen. In the 12 months to August 2025, Australia supplied around 49 percent of Indonesia’s bovine imports, while boxed beef exports hit a record 77,030 tonnes shipped weight—up 8 percent year on year. In wheat, Australia captured 31.1 percent of the market despite broader import fluctuations, with exports valued at in 2024. IA-CEPA’s duty-free provisions have been critical in sustaining these flows, providing Indonesia with consistent, high-quality supplies even amid global competition.
But challenges—from climate volatility and geopolitical uncertainty to broader supply-chain fragility—are putting growing strain on trade-dependent food security. In this context, transactional trade alone is no longer enough.
To this end, two key measures could strengthen Australia–Indonesia agricultural cooperation.
Firstly, trade predictability could be strengthened. Indonesia’s self-sufficiency policies are understandable, given domestic sensitivities around prices and availability. However, fluctuating quotas and import restrictions can create uncertainty for suppliers and complicate planning, especially during global disruptions.
Expanding frameworks such as IA-CEPA to support longer-term supply arrangements—particularly for wheat, feed grains and protein—would help buffer both Indonesia and Australia against external shocks without undermining Indonesia’s domestic production goals.
This would also advance broader strategic interests. Stronger economic ties align with Australia’s deepening engagement with Southeast Asia. As Canberra’s Southeast Asia Economic Strategy to 2040 notes, the security and prosperity of Australia and the region are increasingly intertwined. In this light, more stable agricultural cooperation between Australia and Indonesia would safeguard food security while also strengthening long-term regional stability.
Encouragingly, high-level engagements—including the Ninth Australia–Indonesia Foreign and Defence Ministers’ 2+2 Meeting and the 2025 Annual Leaders Meeting in Jakarta—have already elevated agricultural trade and food security as shared priorities, signaling appetite for deeper cooperation.
Secondly, greater emphasis should be placed on innovation and integration across value chains and logistics. Joint research and development on climate-smart agriculture can help address shared vulnerabilities (like drought and soil degradation), while investments in logistics and cold-chain infrastructure can improve reliability across Indonesia’s archipelagic food system.
Some progress has already been made. The Australia–Indonesia Partnership for Promoting Rural Incomes through Support for Markets in Agriculture (PRISMA) collaborated with private-sector partners to enhance smallholder access to markets, inputs, and technology, directly supporting innovation and value-chain integration.
Between 2019 and 2024, PRISMA leveraged AU$39 million in private-sector investment, delivering average income increases of 184 percent for more than 1.2 million smallholder households. In pig farming alone, incomes rose 405 percent for over 130,000 farmers, while adoption of improved inputs climbed sharply, demonstrating how targeted programs can build both productivity and resilience.
Yet more can be done. Expanding similar initiatives would allow Australian expertise in precision farming, livestock management and adaptive crop varieties to be transferred more systematically to Indonesian producers. This would strengthen domestic supply, raise rural incomes and reduce long-term vulnerability to import shocks.
Scaling such efforts would also align closely with the Australia–Indonesia Development Partnership Plan (2024–2028) and the Comprehensive Strategic Partnership Plan of Action (2025–2029), which prioritize sustainable agriculture and food security.
Challenges remain. Persistent biosecurity threats continue to complicate trade, alongside licensing delays and quarantine requirements. Domestic political pressures, environmental constraints, and broader strategic considerations in Australia also shape export policy and capacity, underscoring the need for flexible, non-binding arrangements that strengthen resilience without constraining domestic policy space.
Historical episodes highlight the stakes. In 2011, Australia imposed a six-month ban on live cattle exports to Indonesia following the broadcast of footage showing animal cruelty in Indonesian abattoirs. The suspension caused estimated losses of up to A$320 million and strained bilateral relations. Although the dispute was eventually resolved through negotiations and improved animal welfare standards, it underscored how fragile food trade relationships can be when trust breaks down.
Canberra drew important lessons, particularly the value of consultation and understanding local conditions. Moving forward, regular high-level consultations among trade and agriculture officials could help manage frictions early and provide a forum for resolving disputes before they escalate, ensuring stability in a relationship critical to regional food security.
Australia and Indonesia share geography, complementary strengths and a common stake in Asia-Pacific stability. Deepening agricultural cooperation would safeguard food security, lift rural incomes and enhance resilience in both countries. In an increasingly fractured geopolitical environment, stronger intra-regional trade and more resilient food systems are essential to regional stability. Food is simply too important to leave off the region’s policy menu.
This article written by Genevieve Donnellon-May, Director of Food & Water Research. She is also a Vasey Fellow at the Pacific Forum in the United States, a non-resident fellow at the Yokosuka Council on Asia-Pacific Studies (YCAPS) in Japan, and a non-resident fellow at the Indo-Pacific Studies Center in Australia. Genevieve is also an associated fellow at the Institute for Security Development Policy in Sweden.
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