PALMOILMAGAZINE, JAKARTA – Indonesia’s planned overhaul of strategic commodity export governance must be implemented carefully to ensure efforts to strengthen oversight and reduce foreign exchange leakages do not ultimately weaken the position of palm oil smallholders and cooperatives, according to the Forum Petani Kelapa Sawit Berkelanjutan Indonesia (FORTASBI).
The organization acknowledged that tighter export governance could deliver important benefits, including stronger monitoring of export transactions and improved control over export revenues. However, it also warned that an overly centralized system with limited stakeholder participation could create new risks within the national palm oil supply chain.
Chairman of Koperasi Perkebunan Belayan Sejahtera (KPBS), Jamaluddin, said the government’s efforts to combat under-invoicing practices and improve export supervision deserve support, but implementation must remain transparent and inclusive for farmers and cooperatives.
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“We support the government’s goal of preventing export leakages and strengthening national trade governance. However, the system must remain transparent, avoid creating new monopolies, and continue to provide room for farmer and cooperative participation,” Jamaluddin told Palmoilmagazine.com on Sunday (24/5/2026).
FORTASBI believes a more controlled export system could potentially improve oversight of contracts and export transactions, strengthen management of export proceeds, and enhance Indonesia’s bargaining position in global commodity markets.
At the same time, the group warned of several challenges that should be anticipated early in the policy implementation process.
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According to Jamaluddin, excessive centralization through a single-gate export mechanism could create bureaucratic bottlenecks that may slow trade flows and increase transaction costs if not supported by efficient service systems.
“The biggest risk of an overly centralized system is the emergence of bureaucratic barriers, export delays, and additional costs that could eventually be passed on to mills, cooperatives, and even farmers through lower fresh fruit bunch (FFB) prices,” he said.
He emphasized that the impact of export policies extends beyond international trade and directly affects domestic supply chains involving exporters, palm oil mills, cooperatives, and smallholders.
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Under poorly managed policies, FFB prices could come under pressure due to tighter sales requirements and changes in transaction mechanisms. Smallholders are considered particularly vulnerable if they lack proper land legality, plantation data, and strong economic institutions.
FORTASBI therefore urged the government to ensure all new export policies continue to involve consultation with farmers and cooperatives, while also providing transparent pricing formulas and transaction mechanisms.
FORTASBI Secretariat Head Rukaiyah Rafik stressed that palm oil smallholders must also prepare for changes in export governance by strengthening farmer organizations and improving sustainable agricultural practices.
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“Farmers should not merely become objects of policy. They need to strengthen their bargaining position through cooperatives, improve plantation data and legality, and implement good agricultural practices to remain competitive,” she said.
The organization also highlighted the importance of strengthening cooperatives to maintain balance within Indonesia’s palm oil supply chain. Cooperatives, according to FORTASBI, must improve traceability systems, transaction records, and governance capacity to adapt to increasingly complex trade regulations.
Beyond production improvements, FORTASBI also encouraged smallholders to develop alternative income sources outside the palm oil sector to improve household economic resilience in production regions.
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For FORTASBI, strengthening export governance should not focus solely on trade supervision and state revenue collection, but also serve as momentum to reinforce the role of palm oil farmers as an integral part of Indonesia’s national industrial ecosystem.
“Farmers and cooperatives must be involved from the beginning so that policies are not only strong on paper, but also fair and effective in practice,” Rukaiyah concluded. (P2)
