June 23, 2026
JAKARTA – The saying “there is no such thing as a free lunch” has rarely been more relevant than in today’s debate on Indonesia’s food system, or the activities surrounding production, consumption, governance, economics of food and its impact on nature and population health.
While food may appear affordable in supermarkets or politically attractive like the free nutritious meals program or food self-sufficiency campaign, the true costs are often hidden. It is quietly paid elsewhere, by local communities who lose their land in competition with state-supported plantation expansion, by people displaced by erosion and floods after upland forest has been cleared for agricultural use, by children exposed to water pollution and other environmental risk linked to poorly regulated agriculture and land practices. Subsidies, permits and public investment priorities that favor extractive food production and agriculture have pushed the ecosystem beyond limits resulting in deforestation, water pollution, land degradation and ultimately jeopardizing long-term food security.
Our recent study highlights the undeniable reality of these challenges. It is estimated that Indonesia’s food system generates hidden costs equivalent to a staggering 28–45 percent of GDP in 2023, across many activities. These costs include environmental degradation, health impacts from poor diets and pollution, water scarcity, greenhouse gas emissions, natural resources depletion, food loss and waste, and more.
These figures represent tangible suffering, as farmers struggle with declining soil fertility and extreme weather from climatic change, families exposed to floods and landslides and children facing undernutrition, micronutrient deficiencies and overnutrition (overweight and obesity), that coexist at the same time.
Indonesia’s food production and agriculture generate significant environmental externalities through deforestation, peat degradation and agriculture practices that degrade soil, pollute water resources, deplete natural resources, cause land conflicts and more. While these impacts are excluded from market prices, they accumulate long-term damage to ecosystems, public health and social equity.
When ecological limits are exceeded or social protection fails, they resurface abruptly in the form of agrarian conflict, livelihood loss or disaster. The most devastating example is the large land use changes in Sumatra as the impact of palm oil expansion left minimal water absorption areas, which led to huge floods that hit Aceh, West Sumatra and North Sumatra last year that cost Rp 51.73 trillion (US$2.9 billion).
At the core of these issues is how land and production resources are used, and who controls them. Indonesia’s food system has long relied on large scale land conversion for monoculture crops, plantations and infrastructure projects framed as promoting food security and economic growth. However, this model has weakened natural systems that historically regulated water flow, protected soils and supported local livelihoods.
Such change in the landscape and food production also undermines traditional food systems and agroecological practices. Forests, rivers and coastal ecosystems once provided diverse sources of nutrition, income and resilience, particularly for local communities and indigenous peoples. In Papua, indigenous communities would forage and hunt for foods from the forest, such as sago, wild bush meats and legumes. As these ecosystems are degraded, for example by large food estates, communities lose access to wild food, livelihoods, clean water, culturally important foods and relations with the land and ecosystem. Ultimately, the loss of nature directly translates into diminished food security and human wellbeing.
Who bears the true cost of food that appears affordable? What emerges from this interconnected crisis is a clear message: food that seems affordable is often made so by shifting costs onto those with the least power and resources. This does not mean food needs to be expensive, it means, internalizing hidden cost is a structural process of realizing food is accessible to all equally without compromising the security of one group for another, in policy and in practice.
Indonesia’s current food system relies on undervalued land, under-protected ecosystems and invisible labor and suffering. Farmers absorb climate risks; rural communities bear disaster losses and future generations inherit degraded landscapes and rising health burdens. If Indonesia is truly committed to building a sustainable and just food future, these hidden costs must be recognized and internalized.
Requiring polluters to take responsibility and pay for damage could generate funds to be directed to help smallholders and households reduce risk, such as climate-resilient farming initiatives. For instance, this can be done in tackling palm oil-driven deforestation and peat fires in Kalimantan and Sumatra where large plantations contribute significantly to toxic haze pollution, carbon emission and loss of biodiversity.
At the same time, Indonesia’s reforming fertilizer subsidies to encourage more sustainable agriculture practices, moving away from excessive use of chemical fertilizer that is degrading soil health, would be a critical step.
Greater participation of local communities, women and indigenous peoples would strengthen land management and promote equitable agriculture.
Rethinking food systems is not only about increasing production and focusing on certain food crops. It is also about putting people and nature at the center, which means refusing to let the real costs of food systems remain hidden.
Lucentezza Napitupulu is an economics and business lecturer at the University of Indonesia. Romauli Panggabean is knowledge generation lead at KSPL/FOLU Indonesia.