Indonesia’s Regenerative Agriculture Transition Cannot Rest on Farmers’ Shoulders Alone

Climate change and extreme weather events are placing increasing pressure on Indonesia’s food security. These challenges call for a transformation of food systems that goes beyond pursuing higher productivity to building the capacity to adapt and withstand environmental changes. In this context, various approaches, including regenerative agriculture, are gaining attention as part of efforts to develop more resilient and sustainable food systems. Ultimately, agricultural transformation must be viewed holistically, focusing not only on crop yields but also on ecosystem resilience, the sustainability of local economies, and farmers’ long-term well-being.

Put simply, regenerative agriculture is an approach that places soil health, water resources, and biodiversity at the centre of sustainable food production. It encompasses a range of practices, from minimising soil disturbance and planting cover crops to crop rotation and livestock integration. These practices are not intended to be applied uniformly but adapted to the specific land conditions, environments, and commodities of each region. When implemented appropriately, they have the potential to sustain agricultural productivity, improve input efficiency, and strengthen farmers’ incomes and livelihoods.

The good news is that Indonesia is not starting from scratch. Several principles of regenerative agriculture are already embedded in the country’s traditional farming practices. Intercropping and Bali’s traditional subak irrigation system, for instance, demonstrate how elements of regenerative agriculture have long been practised in local contexts. The challenge now is to strengthen these existing practices through modern technology and agricultural economics, enabling broader adoption and greater benefits for the environment, productivity, and farmers’ overall well-being.

Scaling regenerative agriculture cannot happen overnight. The transition requires time, investment, and adjustments to production processes. In the early stages, farmers may need to learn new practices, adopt specific equipment, and bear additional costs. In some contexts, yields may also decline before the benefits of regenerative practices begin to emerge. This creates a gap between the upfront costs and risks farmers must bear and the benefits that may only materialise over the medium to long term. Managing this gap is essential to encouraging wider adoption of regenerative agriculture.

For Indonesia’s more than 17 million smallholder farmers with very limited landholdings, who depend on seasonal income and working capital to sustain their operations, absorbing the upfront investment and transition risks is particularly challenging. When the benefits of regenerative practices may take several growing seasons to materialise, farmers have limited financial capacity to fund these changes independently. Leaving farmers to shoulder the entire burden of transition is therefore not only unfair but also unrealistic if regenerative agriculture is to be adopted widely and sustainably.

The costs and risks of transition must be shared proportionately among those who will also benefit from regenerative agricultural practices.

The benefits of regenerative agriculture extend far beyond individual farms. These practices can strengthen supply chain resilience, stimulate rural economies, and contribute to more resilient food systems. Since the benefits reach a broader range of stakeholders and unfold over a longer period, it is neither reasonable nor realistic to place the full cost of achieving them on farmers. What is needed is a supportive ecosystem capable of absorbing costs and risks at different stages of the transition until regenerative practices become increasingly economically viable.

In the early stages, for example, when regenerative agricultural practices and business models still need to be tested and developed, philanthropic funding can play an important role. Philanthropy has greater flexibility to take on risks that commercial financing is not yet prepared to absorb. Support for training, technical assistance, agricultural inputs, and business model development can help build evidence and reduce uncertainty, gradually making these practices more attractive to investors and financial institutions.

As risks decrease and business models become more established, opportunities to attract more sustainable financing begin to emerge. Governments can help create enabling conditions through financing programmes, agricultural insurance, credit guarantees, and policies that reduce uncertainty for farmers and businesses. At the same time, financial institutions and development finance providers can begin supplying capital to scale approaches that have demonstrated commercial viability.

Ultimately, the sustainability of the transition also depends on genuine market demand. For companies that rely on agricultural commodities, supporting regenerative agriculture can become an investment in the long-term continuity of their own businesses. Long-term purchasing agreements, volume commitments, and incentives for farmers can provide greater certainty and help offset some of the costs and risks during the transition.

When these forms of support are combined with reliable market demand, regenerative agriculture has a stronger chance of expanding beyond an environmentally beneficial practice into an economically viable model.

No single actor can deliver this transition alone. However, every stakeholder has a role to play in reducing the risks faced by farmers. With access to training, technical support, financing, and risk protection, farmers will be better positioned to adopt regenerative practices sustainably.

The momentum for change is already building. Philanthropic institutions are beginning to mobilise, companies have launched various pilot initiatives, and the government has signalled policy support in the same direction. The challenge now is to ensure that these efforts are connected, coordinated, and capable of reaching a much larger scale.

We cannot expect farmers to bear the cost of transforming a food system whose benefits are shared by everyone. If the benefits of regenerative agriculture are collective, then the risks and responsibilities of making it happen must be shared as well.

This article was written by Hilwah Al Wyni CEO Delivery Strategist at Pijar Foundation, and was originally published by CNBC Indonesia.