Climate shocks and agricultural output dynamics in Indonesia

Abstract

Climate change presents a significant threat to Indonesia’s agricultural sector, which is a crucial pillar of the nation’s economy and food security. This study investigates both the short- and long-term impacts of climate change on agricultural output in Indonesia, using an autoregressive distributed lag–error correction model approach and annual time series data from 1983 to 2019. The findings suggest that an increase in the number of hot days (T-max > 30 °C) exerts a significant negative short-term impact on agricultural output, reducing it by 0.085%. In contrast, carbon dioxide (CO2) emissions and fertiliser consumption have significant positive effects in the long term, with an increase of 0.403% and 0.625%, respectively. Extreme temperatures consistently reduce agricultural output and thus require adaptation strategies, whereas CO2 has the potential to stimulate crop growth and increase productivity. To solve these problems and improve food security, policies should focus on climate-smart farming practices. This includes managing emissions responsibly, using different types of inputs, producing more organic fertilisers locally, and accelerating the development of biofertilisers. This strategy will enhance climate resilience by harmonising economic efficiency and ecological sustainability within Indonesia’s food system.

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