With 237 million inhabitants, Indonesia is the world’s fourth most populous country. Despite recent global economic crises, Indonesia has witnessed steady economic growth in recent years. The country rose to lower middle income status in 2009 and has experienced a gradual reduction in overall poverty, from 17 percent in 2004 to 13 percent in early 2010 (IFAD 2012). Indonesia’s economic growth is expected to reach 6 percent in 2012 and 6.4 percent in 2013. The country’s gross national income per capita has steadily risen from $2,200 in the year 2000 to $3,720 in 2009.

In spite of this progress, however, more than 32 million Indonesians currently live below the poverty line. In addition, approximately half the population lives just above the poverty line set at 200,262 rupiahs per month (US$22). These “near poor” households are particularly vulnerable to shocks such as food price spikes and disease outbreak. Poverty is increasingly concentrated in rural areas, where 70 percent of the population lives. Compared with 9.9 percent of urban populations, 16.6 percent of rural people are poor (IFAD 2012).

Although Indonesia produces potentially high-value crops such as cocoa and spices, further investment is needed to improve the necessary processing and marketing systems needed to take full advantage of such high-value products. Food insecurity and under-nutrition are persistent challenges, and the country’s stunting levels are alarmingly high. In 2007, an estimated 7.7 million children under 5 (36.8%) were stunted (2007). The stunting rate is higher than 30% in most districts (ranging from 23-58%) (WFP 2012).

To address its economic and food security challenges, the government of Indonesia has formulated a development plan spanning 2005-2025. The overall plan includes 5-year medium-term plans, each with different development priorities. The current medium-term development plan covering 2009-2014 is the second phase and focuses on:
• promoting quality of human resources
• development of science and technology
• strengthening economic competitiveness.