PALMOILMAGAZINE, JAKARTA — At the “Business Roundtable: Unlocking Opportunities: Advancing Indonesia’s Leadership in Sustainable Palm Oil” event organized by the Global Alliance on Sustainable Planet (GASP) and the Indonesia Palm Oil Strategic Studies (IPOSS), Indonesia’s Deputy Minister of Agriculture, Sudaryono, confidently outlined the strategic role of the palm oil industry in the national economy.
Addressing participants, he highlighted how palm oil has become a cornerstone of Indonesia’s economic development, creating millions of jobs and driving rural growth.
“The palm oil industry contributes 3.5% to the national GDP and supports the livelihoods of around 16 million people, both directly and indirectly,” Sudaryono said in his speech, attended by Palmoilmagazine.com, in mid-February 2025.
He detailed that 4.2 million workers are directly employed in the sector, while another 12 million benefit through its supply chain. Beyond employment, palm oil plays a vital role in food security, producing around 10 million tons of cooking oil and other food products annually.
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However, he acknowledged that significant challenges remain. “We cannot turn a blind eye to environmental issues, biodiversity loss, and the limited access smallholder farmers have to sustainability certification,” he stressed. Many smallholders, he noted, struggle to meet sustainability standards, limiting their access to global markets.
To address these challenges, the government has prepared an ambitious strategy. With a goal to grow the palm oil sector by 8% over the next five years, the Ministry of Agriculture is targeting 100 million tons of Crude Palm Oil (CPO) production by 2045.
Currently, Indonesia’s national CPO output stands at 46 million tons — 20 million tons for domestic use and 26 million tons exported globally.
To achieve this, the government is implementing three main strategies:
- Regulatory Support:
The government is strengthening land governance through collaboration with various ministries and agencies, including the Ministry of Environment and Forestry and the National Land Agency. Initiatives such as the mandatory biodiesel program and the development of the B50 standard are also key steps to reinforce the sector. - Upstream Productivity Enhancement:
Efforts are underway to rejuvenate smallholder plantations, improve crop maintenance, and resolve issues related to plantations located within forest areas. Supplying quality seeds is another major priority, with a target to distribute 420 million superior seedlings to meet domestic needs. - Downstream Sector Strengthening:
The government is expanding biodiesel plant capacities and advancing new technologies to boost production efficiency. At the same time, it continues to refine biofuel quality standards to ensure biodiesel remains viable for both transportation and industrial sectors.
These combined efforts are designed to ensure Indonesia’s palm oil sector remains a key driver of sustainable economic growth well into the future. (P2)
