Institutional Arrangement of Agriculture Development in Indonesia: Lesson Learn from Korea through 6th Order of Industrial Agriculture System

Abstract

The development of economy in the recent years has successfully changed the Indonesian economy from agricultural economy to Industrial economy. However, when the sectoral output contribution decreases sharply, it does not mean that agriculture sector becomes unimportant factor in the Indonesian Economy. In recent years, the data shows that the agricultural sector still absorbs high employment compared to other sectors, which amounted to 30.9% of the total 121.7 million workforce. Increasing instability in the management of the agricultural industry and increasing population resulted in reduced regional vitality and community productivity. Therefore, through the policy concept of The Sixth Order Industry, it is important for the Indonesian government to build policy support and measures to promote the local economy in maintaining the welfare of the agricultural community. The purpose of this study is to determine the priority of policy objectives and support related to the 6th-order agricultural industrialization policy and identify the rules of agricultural institutions in Indonesia through the concept of the 6th-order agricultural industrialization policy. The method used study of literature and SWOT. Based on the results of the analysis, it can be seen that marketing and financial support are the most important means among several policy tools in achieving the goals of The Sixth Order Industry. Improving governance, agricultural management from upstream to downstream, and increasing cooperation between farmers, industry and banking are the keys to the success of agricultural development in Indonesia in order to achieve food sovereignty.