December 9, 2021
December 9, 2021


Loop Farm: A Solution to Smoothly Implement Circular Agriculture While Reducing Youth Unemployment And Increasing The Social Mobility Of The People In Indonesia

Arranged by:
Irfan Syaifuddin Hasibuan
(Business Economics, Universitas Prasetiya Mulya)



Climate change received more attention recently. Although the danger of it was found long ago, only recently the devastating consequences of it become more apparent. One important thing to note is that climate change is “the biggest threat modern humans have ever faced” (United Nations [UN], 2021). The primary factors of climate change are the activities of humans (Dale, 1997; Purdey, 2012; Ramanathan, 1988). Since the industrial revolution, we have pumped an uncontrollable amount of carbon into the atmosphere (Mgbemene, 2016; Kennedy, 2009; Fecht, 2021). Even though the earth has its own way to lock away the carbon from the atmosphere (National Oceanic and Atmospheric Administration [NOAA], 2021), it cannot work properly now because of the decreasing diversity of wildlife. The biodiversity of the planet is an important factor in the carbon cycle. Therefore, when the diversity of wildlife on land and below water is decreasing, more and more carbon will be released to the atmosphere, which in turn, leads to the rising temperature on the earth (Kaplan, 2021; Gill, 2021; Chami et al., 2019). But what causes the decreasing biodiversity? Simply put, humans.


Human beings consume biological resources from nature, and consuming them is the only way we could keep living. Even though those resources may appear able to be “renewed,” they are not infinite. Biological resources such as vegetables, fruits, fish, and meats, can be used up if we consume them in a way that does not allow them to grow in number. And that is exactly what we do nowadays: we exploit them not in a sustainable way. We cannot expect to be continuously able to consume them if we are stuck in our current way of living (Ahmed & Javed, 2016; Rivera, 1997). Moreover, unsustainable agricultural practices cause overfishing and deforestation to open up lands for farming (Christie et al., 2005; Cámara & Santero-Sánchez, 2019; Christensen et al., 1996; Kock et al., 2007), which reduces the biodiversity on land and below water. 


Every country in the world has made some kind of policies to address this, one of them is circular agriculture. “Aims to reduce agricultural waste and environmental pollution by focusing on reusing, reducing and recycling material and energy in agricultural production systems” (Cook & Buckley, 2015). The concept of circular agriculture revolves around the idea that there is no waste in nature: the waste of other organisms is used by another organism, which makes a cycle. This approach is based on sustainable development thinking and circular economic theory, and involves ecological engineering and technologies “to increase reuse of material and energy in production systems, thereby controlling inputs and reducing waste” (Cook & Buckley, 2015).


However, there are several challenges for Indonesia in order to apply this approach. Firstly, farmers in Indonesia receive very low returns. The supply chain in the agricultural industry is very long. Of course this leads to higher costs: transportation and transaction costs to name a few. On the other hand, sustainable techniques in agriculture lead to higher production cost most of the time. Furthermore, “income poverty remains high and almost one fifth of the family farms in Indonesia live below the national poverty line” (Food and Agriculture Organization [FAO], 2018). Therefore, it is not a surprise if the farmers feel reluctant to apply those techniques despite its sustainability.


Secondly, farmers are usually run in the family, and most of the cases, those families have low income as well as capital. With that being said, not many farmers have both an animal husbandry and a farm. Therefore, they cannot follow the concept of circular agriculture on their own. Even if their fellow farmers have an animal husbandry, which is a cooperative action by exchanging waste with each other, most of the farmers choose to use pesticides rather than carrying the extra transportation costs.


Another factor that needs to be considered is that younger generations are more attentive to the problem of climate change and sustainability (Winston, 2019). This may have to do with the fact that their future is the one that is at stake, not that of the older generation. How is it related to circular agriculture? Well, nowadays, only a small percentage of the youths are interested in becoming a farmer. Iswara (2020) argues that only 23 percent of the country’s 14.2 million people aged between 15 and 24 worked in the agriculture, forestry and fishery sectors in 2019. Because they will only get a small return from farming, they believe that becoming a farmer is not that great. This is also supported by the fact that farmers in Indonesia are also very vulnerable to poverty and have very low social mobility (FAO, 2018). Thus, their children might get unequal opportunities which will cause intergenerational poverty and inequality.


Farming in Indonesia also experiences a very slow rate of innovation. One of the reasons is this is not a first career choice for most Indonesian youths. Urbanization is also at fault for causing a brain drain from rural areas to urban areas. Ironically, there are many young people that are unemployed in urban areas. Looking at the current atmosphere of a competitive labor market, young people, especially those who are low-skilled, will not have a chance to compete in the environment. A report from the International Labour Organization (ILO) states that “young people in Indonesia are five times more likely to be unemployed than adults”.


That is why we cannot only consider the implementation of circular agriculture from the perspective of environmental science, but also economics, politics, and others. To make sure that the implementation goes smoothly, we must increase the return on investment for the farmers first. Only then the farmers will be more open to the new farming techniques that are more sustainable. We also need to incentivize Indonesian youths to get into farming since they are the future of the agricultural system in Indonesia. By doing that, we might also solve the problem of youth unemployment by transferring them from urban areas to rural areas. Fortunately, there is a solution for them all: Loop Farm. In this writing, the author will explain about Loop Farm, and it can solve the problems explained before as well as allowing the smooth implementation of circular agriculture.



People in urban areas “spend an average of 30 percent more on food than in rural areas” (FAO, 2002), and to provide for them, they rely on the production of food from rural areas. Even though this is how it is for a very long time, it needs to change for several reasons. The first is, to provide the urban population with food, more and more land needs to be opened for farming which reduces the biodiversity of wildlife on land and further quickens climate change. The second is, the transportation of the food from rural to urban areas increases the cost of the production of the food itself, which makes those foods have higher prices in urban areas. This could further exacerbate the poverty and inequality in urban areas.

Loop Farm could be a solution to make urban populations more independent in terms of food supply. Loop Farm will be the epicentre of hydroponic agriculture in the heart of big cities. It will positively impact the environment and slow down climate change since hydroponics is one of the ways to produce more food with much less land. Other than that, this will allow the decreasing price of several kinds of food, such as tomatoes, lettuce, cucumber, etc., for the urban population.

However, there are several kinds of fruits, vegetables, spices, and meats that cannot be grown with hydroponics. For that, we need the production of agri-food from rural areas. Loop Farm will directly get the food from the local farmers without involving third party collectors. This will further reduce the supply chain and transaction costs, which will increase the return for the farmers. While transporting those foods, we could use the vehicle of transportation to ease the exchange of the waste from animal husbandries to agriculture farms, which will further support the implementation of circular agriculture. In conclusion, Loop Farm could increase the income of the farmers in rural areas, decrease poverty and inequality in urban areas, and support the implementation of circular agriculture in Indonesia.


Naturally, Loop Farm would lead to more employment opportunities in the city. This will reduce the unemployment rate, poverty, and inequality in the urban areas. This organization will employ more young people with various degrees of education. This will hopefully equalize the opportunity for the people and increase their social mobility. Moreover, Loop Farm could make the farming community become closer, that is to improve the connection between farmers from all corners of Indonesia. Consequently, the challenges on farming and the further development of the agricultural system can be worked on more effectively and efficiently.

Other than giving our employees’ wages and insurances, bonuses will be given in the form of our stocks once we are becoming a public company. Young people need to have savings to improve their social mobility much higher. With giving them the stocks of the company, they have the opportunity to get extra income as we grow as an organization. This type of system will improve the standard of living of many people in Indonesia. Therefore, in conclusion, Loop Farm will increase youth employment in cities and social mobility of the people. This also shows that Loop Farm will promote the understanding of Planet, People, and Profit.


Indonesia has a wide variety of food that is very appealing to the international market. Loop Farm could ease the exports of the products and increase the income of the farmers quite significantly. This company could also expand its business to other countries, which will further increase the national income of Indonesia. This will enhance the economic growth of Indonesia and increase the standard of living of the citizens of Indonesia.


As explained above, climate change is very critical to be addressed. Not only does the current agricultural practices speed up climate change, it also cannot support our sustainable life as humans. However, the current economic situation of the farmers in Indonesia could hinder the implementation of more sustainable farming practices in the country. Loop Farm supports these farmers by increasing their income and ease the exchange of waste of agricultural farms and animal husbandries which is the concept of circular agriculture.

Not only that, Loop Farm will improve the standard of living in urban areas by reducing the unemployment rate, poverty, and inequality. As the epicentre of hydroponics in the city, Loop Farm will make urban areas more independent in terms of food production. This will reduce the price of agricultural foods and increase the people’s purchasing power. This organization could also reduce the youth unemployment in the city and increase their social mobility. The wages paying scheme of including stocks will make sure the economic condition of the people enhances as the company grows.



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Hanifan Ramadhan
Hanifan Ramadhan
Hanifan Ramadhan is a tech enthusiast who has been working as an administrator for IAAS Indonesia website.

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