JAKARTA :Indonesia’s newly-launched state farm company plans to invest 8 trillion rupiah ($479 million) until the end of next year to build production capacity by buying modern farm equipment and adding rice mills, its chief executive said on Tuesday.
Launched in May with the task of boosting rice output to attain President Prabowo Subianto’s ambition for Indonesia to become self-sufficient in the staple, Agrinas Pangan Nusantara was formerly a state-owned construction services firm.
By the end of 2026, it aims to build 20 “food production centres” nationwide, each equipped with grain dryers, rice mills, feedmills and silos, Chief Executive Joao Angelo De Sousa Mota told Reuters.
To do this, the company would either partner with small farmers, renting them equipment, or run its own farms, Mota said, adding that it stood to receive 225,000 hectares (556,000 acres) of land from the agriculture ministry by year-end.
“When we invest using state money, we have to calculate how to make this system work and succeed,” Mota added. Asked how much the investment would be, he replied, “Eight trillion rupiah,” or the equivalent of $479 million.
The company hopes to boost its rice output capacity to 4 million metric tons a year, said Mota, a longtime friend of Prabowo. That compares with total national output of 30.6 million tons in 2024.
It has already started to develop a 400-billion-rupiah production centre on 12,000 hectares (about 30,000 acres) of land owned by the military in Baturaja, South Sumatra, Mota said.
Here it will plant rice and corn, making use of modern farming technology that many other countries use, but which is far less common in Indonesia, he added.
Such equipment includes bigger, customised machinery ordered from India’s Mahindra Group that would be more efficient for Indonesian soil, along with drones for fertiliser spraying, and satellite monitoring equipment, he said.
Mota said Agrinas Pangan would help improve national farming productivity by substituting manual labour with machines.
“European and American farmers are prosperous because one family can manage thousands of hectares of land,” he said.
The company has received a capital injection of about 700 billion rupiah ($42 million) from its parent, sovereign wealth fund Danantara Indonesia, and plans to seek bank loans to fund the rest of its capital expenditure, Mota said.
($1=16,690.0000 rupiah)
