Omnibus Law and the Challenges of the Indonesian Agricultural Sector: an Islamic Perspective

Abstract

At the end of 2020, the Indonesian Parliament approved the Job Creation Law, commonly known as the "Omnibus Law", which introduces key amendments to several sectors, including the agriculture sector. Through this legislation, the Indonesian government plans to increase food trade and open up opportunities for the private sector to be more involved in increasing Indonesia's agricultural productivity. However, many observers consider that the Omnibus Law is unfavourable  for farmers and the agricultural sector because it no longer requires the government to prioritize local agriculture products, and only imposes an obligation on the government to increase the productivity of local agriculture. Imports become one of the main sources of domestic food supply, apart from domestic production and national food reserves. The law will also remove the restriction for foreign investment in the horticulture sector and introduce  a land bank to collect vacant land which will be redistributed by the government.  Based on this background, this article aims to provide an overview of the impact of the Omnibus law on the current agricultural sector in Indonesia. A descriptive analysis method is used  to compare the Omnibus law with the original laws relating to the agriculture sector.  Finally, by taking on an Islamic perspective, it will discuss the substance of the Omnibus law, the essence of the Indonesian agriculture sector in relation to relevant regulations in terms of challenges and upcoming prospects, as well as policy implications as a conclusion.