Proposed Sugar Self-Sufficiency Policy in Indonesia Using System Dynamic

Ananda, Defri (2025) Proposed Sugar Self-Sufficiency Policy in Indonesia Using System Dynamic. S1 thesis, Universitas Andalas.

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Abstract

Indonesia is the second-largest sugarcane producer in Southeast Asia, with a total output of 27,158,830 tons recorded in 2023. Despite this substantial production, Indonesia remains highly dependent on sugar imports, with the import ratio ranging between 64.79% and 75.01%. This heavy reliance on imports exposes the country to volatility in the global sugar market, such as India’s sugar export restrictions, droughts and plantation fires in Brazil, and the significant increase in global sugar prices peaking with a 10.4% rise in September 2024. These conditions highlight the urgent need for Indonesia to achieve sugar self-sufficiency to strengthen national food security. This research is aimed at providing strategic policy recommendations to help Indonesia reach sugar self-sufficiency by 2030, using a system dynamic approach. The system dynamic methodology is employed due to its strength in modeling complex and interconnected systems and its ability to simulate long-term policy impacts. The process begins with the development of a causal loop diagram (CLD) to understand the system structure, followed by the construction of a stock flow diagram (SFD) using Powersim Studio 10. Model parameters were estimated using secondary data obtained from various credible and official sources covering the period from 2010 to 2022. Model verification was conducted to ensure structural accuracy, dimensional consistency, and parameter reliability based on historical data. Validation was performed both quantitatively, using the coefficient of determination (R²) and mean absolute percentage error (MAPE), and qualitatively, through expert input from academic and practitioner stakeholders. The baseline simulation (current state) showed that the Self-Sufficiency Ratio (SSR) never reached 80%, indicating Indonesia’s ongoing reliance on imported sugar. A sensitivity analysis is conducted on seven key production-related variables. The three most influential variables, sugar content, state-owned plantation area, and state-owned productivity, were selected for scenario development. Simulation results revealed that the combined scenario of increasing sugar content and state-owned productivity was the most effective intervention, raising the SSR to 101.66% by 2030. The improvement in sugar content can be achieved through sugar mill revitalization, while productivity gains can be realized through intensification strategies based on Good Agricultural Practices (GAP). Therefore, this study concludes that sugar self-sufficiency can be attained through focused intensification policies targeting state-owned plantations, which are more manageable under government control, and through the modernization of obsolete sugar milling infrastructure.

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