PALMOILMAGAZINE, BANDUNG — Facing global market fluctuations and ongoing sustainability challenges, Indonesia’s Palm Oil Fund Management Agency (BPDP) reaffirmed its commitment to stabilizing the national palm oil industry through integrated upstream-downstream programs. Export levy funds are being strategically allocated to support smallholder replanting, strengthen research initiatives, and advance technology and human resources in the palm oil sector.
This was conveyed by Mohammad Alfansyah, Director of Downstream Fund Distribution at BPDP, during the 3rd Technology and Talent Palm Oil Mill Indonesia (TPOMI) 2025 event held in Bandung on July 9, 2025, as reported by Palmoilmagazine.com.
Alfansyah noted that Indonesia remains the world’s top palm oil producer, contributing approximately 59% of global output. However, he acknowledged the industry still faces major hurdles, particularly negative global perceptions related to land conversion and market acceptance of palm oil products.
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To address these challenges, the government continues to boost domestic consumption, particularly through its biodiesel program. “We are maintaining a balance between production and absorption. Since 2017, the government has been increasing domestic utilization to prevent oversupply,” said Alfansyah.
Export Levy Priorities: Replanting and Partnerships
A major focus of the export levy, Alfansyah emphasized, is on funding the People’s Palm Oil Replanting Program (PSR). “PSR must continue annually. Without new plantations, our production will decline,” he stressed.
He also highlighted the growing interest among farmers in PSR partnership schemes. Since 2023, the program has covered more than 20,000 hectares, including 2,404 hectares developed through company partnerships. “Farmer response has been positive. With corporate involvement, replanting proposals have increased,” he added.
Infrastructure Support and Applied Research
Beyond replanting, BPDP has allocated more than Rp129 billion in infrastructure support to 12 provinces based on recommendations from the Directorate General of Plantations.
To strengthen downstream capabilities, BPDP has implemented an extensive research and development (R&D) program. Since its inception, the agency has supported 406 research contracts with 96 institutions. However, Alfansyah underlined the importance of industry-oriented research: “Research must be demand-driven. Otherwise, findings risk being shelved. Industry should define its needs so research outcomes are directly applicable,” he explained.
2025 Research Focus and Project Selection
Arfie Thahar, Head of BPDPKS Research Division, shared that research proposals undergo an 8-month selection process beginning early each year. Current projects were selected in 2024 and will be funded in 2026.
BPDP research funding focuses on seven key areas:
- Bioenergy
- Biomaterials
- Food and Health
- Cultivation (including post-harvest and processing)
- Environment
- Socioeconomics
- Information and Communication Technology
Among the projects underway in 2025 are the development of cost-effective and efficient bioenergy technologies, as well as drought- and disease-resistant palm varieties, including those resilient to Ganoderma.
Human Resource Development and Industry Balance
In addition to infrastructure and R&D, BPDP is investing in human capital through scholarship programs, which have so far supported more than 5,000 students at various educational levels.
“Maintaining balance between upstream and downstream sectors is crucial. We cannot focus solely on downstream processing while neglecting plantation development. As mills increase, plantations must also be reinforced,” Arfie concluded.
Through these strategic efforts, BPDP continues to play a central role in advancing a sustainable, inclusive, and competitive palm oil industry, ensuring long-term resilience amid increasingly complex global challenges. (P3)
