A boom in joint agricultural research is tipped to result from a higher education handshake between Jakarta and New Zealand, with agreements signed off by both countries, heralding a flood of cashed-up Indonesian exchange students here.

Massey and Victoria universities were selected as "preferred partners" in higher education in agreements signed this week with the Indonesian government and four universities, with plans to spend heavily over several years, providing scholarships for its brightest to study here.

Massey University vice-chancellor Steve Maharey said his five-day trip had "piggy-backed" on Prime Minister John Key and Trade Minister Tim Groser's visit to Jakarta this year.

Over the next five years the Indonesian government, through the directorate-general, will provide scholarships for up to 10 PhD or masters students and Massey will provide up to 10 English language study awards for PhD students. Research co-operation between Massey and Indonesian universities is also planned.

Maharey said the opportunity to focus joint research on agriculture and food production was clear.

"Food is probably one of the two or three biggest issues for Indonesia at the moment ... they want to be self-sufficient," he said. "They are one of the biggest per-capita consumers of rice and that [food source] is one of the real problems around the world at the moment. That means there are a lot of research opportunities for both how to produce the products they want and how to grow those crops."

Indonesia joined the ASEAN-Australia-New Zealand Free Trade Agreement in January, and by April heads of state signed off four new trade agreements focused on sharing agricultural expertise.

Indonesia's burgeoning middle class is predicted to provide a hungry export market for our beef and dairy industry.

Tertiary Education Minister Steven Joyce said the partnership would promote lifelong links between the countries.

"Indonesia has a population of 240 million people and by 2030 will be the world's sixth largest economy," he said.

"There are around 40 million Indonesians with middle incomes who want to lift the education of their people and that means there are massive opportunities for our tertiary institutions, such as Massey, to attract more students to New Zealand."

But universities were also reaching out to Asian tertiary markets with business in mind.

According to the International Dairy Federation, New Zealand has the capacity to provide dairy products for 165 million people.

Two Chinese universities - Peking and Shihezi, which has a strong interest in sheep research - signed a Memorandum of Understanding with Massey this year to promote closer working ties.

"They are extremely aware of agriculture as one of the areas of expertise at Massey," Maharey said.

Asian international students traditionally contributed heavily to the New Zealand economy, spending about $18,000 apiece on average, with wealthier exchange students estimated to be likely to spend up to $50,000, Maharey said.

- © Fairfax NZ News