The farmer is the asset nobody depreciates
· 7 min read
This is article 4 of 4 in the On Biological Time series. Here is article 3.
On 24 September, Rina Saadah, a member of Commission IV of Indonesia’s House of Representatives, which oversees agriculture, put the problem in a single sentence: “Kita menghadapi salah satu persoalan besar, yaitu krisis regenerasi petani”. We are facing one of the major problems, namely a crisis of farmer regeneration.
She was not overstating it. The Ministry of Agriculture runs programmes to bring young people into farming, and it is right to. Millennials aged 19 to 39 make up around 6.18 million of Indonesia’s farmers, about 22 per cent of the total, which is a real base to build on. The rest of the census tells the other half of the story, and it is the half that every company sourcing from a smallholding should read.
Every company that owns a machine knows how old it is. The purchase date sits in the fixed asset register, the useful life is estimated, and a slice of the value is written off every year until the machine reaches the end of its working life. Nobody is surprised when it needs replacing, because the replacement was budgeted years in advance.
Now look at the supply chain behind any food, oil or fibre product that comes from a farm. The tractors, the mills, the warehouses and the ships are all on somebody’s register. Their ageing is tracked, their replacement is planned and the auditor signs it off.
The farmer is on no register at all, and yet he is the asset everything else depends on.
Indonesia’s 2023 agricultural census recorded what the ground already knew. The number of individual farm holdings fell from 31.7 million to 29.3 million in a decade. The share of farmers aged 55 to 64 rose from around 20 per cent to more than 23 per cent, and the share over 64 rose from under 13 per cent to more than 16 per cent, while the proportion under 44 fell.
Taken together, nearly 40 per cent of Indonesian farmers are now over 55. Farmers aged 26 and under, the generation that should be learning the ground today, make up just 2.14 per cent.
Indonesia publishes this data in detail, and most producing countries do not, which is not at all the same as their farmers being any younger.
A smallholder who has worked the same ground for forty years carries something that cannot be bought, downloaded or reproduced from satellite imagery. He knows which corner of the plot floods first, which rows bear late, which trees are past their best and which will carry the family for another decade. He knows how his ground behaves in a dry year, because he has lived through enough of them to remember.
Remote sensing has transformed what can be known about land from above. A satellite can measure canopy, count crowns and flag a cleared plot within days of the clearing. What it cannot do is tell you why one row bears and the next does not, or what the man who planted them would do differently if he were starting again. That understanding lives on the ground, in one head at a time, and it has never been entered into any system that capital reads.
That knowledge is accumulated in biological time and cannot be compressed into a training course. It passes, if it passes at all, from parent to child across years of working side by side, and it is lost entirely when that chain breaks.
I have spent fifteen years working alongside smallholders in Indonesia and the Philippines, after a first career in investment banking, and the census figures have faces.
One of them belonged to Pak Sulaiman, a cinnamon farmer in the mountains of Aceh, a great mentor to me and a remarkable man. His sons went to university in Banda Aceh, which is exactly what a father wants for his children, and in the afternoons he walked his rows alone, knowing that his sons would not farm them after him. He died after the pandemic, and much of what he knew about that hillside went with him. I name him here to honour him, because his legacy continues in everyone he taught.
Yet nothing about his passing registered in any supply chain. The cinnamon kept arriving from somewhere, and the register stayed clean.
It is tempting to treat this as a cultural shift, something regrettable and beyond anyone’s control. It is more precise to treat it as a price signal.
The young leave because the ground, as it is currently valued, does not pay them enough to stay. The commodity price reaches the farm gate stripped of most of what made the product worth buying, and the long, patient work of tending perennial crops offers a return that no young person with a phone and a bus ticket will wait for. They are not making an emotional decision. They are making a rational one, on the numbers they have been given.
The discussion at which she spoke pointed the same way. Alif Tri, director of the agricultural venture RUNDING, argued that capital should not be the starting point for young people entering farming, and that understanding the need and the business model must come first. The succession fails not because the knowledge is worthless, but because nothing in the system pays for it to be passed on.
The structure of the land makes this harder still. Indonesia counts around 16.89 million smallholder households farming less than half a hectare, the so-called petani gurem. On a plot that size, the margin for experiment is close to nothing, and the cost of a bad decision falls on the family that made it.
That is exactly where accumulated knowledge is worth most and where its loss costs most. A young farmer inheriting half a hectare without the forty years that came before him is not starting from zero; he is starting from a position where every mistake his father had already made must be made again.
The ageing of the farmer does not happen in isolation. It happens on the same plots where the trees are ageing too, and each makes the other harder to fix.
Around 2.4 million hectares of Indonesian smallholder palm are past their productive age, and researchers have found that the national replanting subsidy is not enough to persuade many smallholders to replant. Since the programme began in 2017, the total replanted has yet to reach 450,000 hectares, against an original target of 180,000 hectares a year.
Replanting means cutting down trees that still produce something and waiting years for their replacements to bear. For a farmer of thirty with children to feed, that is a hard decision. For a farmer of sixty-five with no successor, it is a decision with no reason to make it, because he may never harvest what he plants and nobody is waiting to. So the old trees stay standing, the old farmer keeps tending them, and both run down together on a schedule that no report connects.
If the farmer were a machine, the accounting would be straightforward. His remaining useful life would be estimated, his replacement would be budgeted, and the risk of losing him without a successor would be disclosed. A large share of the stewards in a major sourcing region approaching retirement with no trained replacement would be treated as a material risk, and someone would be asked to explain the plan.
Because he is not a machine, none of that happens. The asset retires without notice, the knowledge leaves with him, and the first sign on any report is a yield that falls for reasons nobody upstream can explain.
The questions here are for anyone whose product begins on a smallholding.
How old are the people who grow what you buy? How many of them have a successor already working beside them? If a third of your supply base stopped farming within the decade, would any of your current reporting tell you before it happened, or after?
Machines are depreciated because someone decided that their ageing mattered, and the farmer has been ageing in plain sight for a generation.
illuminem Voices is a democratic space presenting the opinions of leading Sustainability Thought Leaders, their views do not necessarily represent those of illuminem.
The world needs sustainability knowledge. At illuminem, no interest group or shareholder can influence our work. Thank you for supporting our mission to make high-quality and independent sustainability information free for all. Every contribution helps. Thank you for donating today.
Matt Ross
Agriculture · Food
Matt Ross
Biodiversity · Agriculture
illuminem briefings
Food · Carbon
Sustainable Views
Food · Carbon
Euronews
Adaptation · Agriculture
The Guardian
Agriculture · Carbon