Palm Oil Profit Sharing: Discrepancies in Field Realities

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Illustration of Palm oil plantation. Photo by: Sawit Fest 2021 / Miftahurrohman

PALMOILMAGAZINE, JAMBI – Agus Rizal, Head of the Plantation Agency in Jambi Province, highlighted that with 1,134,640 hectares of palm oil plantations, the province plays a significant role in Indonesia’s palm oil industry.

Of this area, 66.66% consists of smallholders’ plantations, 30.33% belongs to large private companies, and 3.01% is managed by enterprises. This sector holds great potential for improving the welfare of planters and contributing to the implementation of RAD KSB, which focuses on agrarian reform and the distribution of natural resources.

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However, it is important to note that the formulation of the Regulation of Minister of Finance Number 93 / 2023 has led to misunderstandings in its practical application. Collecting data on smallholders, a critical step for agrarian reform, is proving to be costly and challenging.

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“That is why it needs to revise the regulation to confirm that getting data of the smallholders would be more effective and accurate,” he said in the event that Persatuan Organisasi Petani Sawit Indonesia (POPSI) conducted with the support of Palm Oil Plantation Fund Management Agency (PFMA) by the late of 2023.

Rizal continued that smallholders’ data process involved series of activity, such as, socialization in plantation level, escalating capacity of data team, data verification and validation. Besides, it is also important to consider the publication of cultivation documents, field check, the data which everything needs fund allocation significantly for the agency to do, for the officers in duty, and other supporting infrastructures. These would spend much too.

The other things were the development for getting Indonesian Sustainable Palm Oil (ISPO) certificate would be crucial to support sustainability. This should get the data of planters, do socialization, trainings and development. To support these, honor for trainers should be given, transportation, and infrastructure, map and certification.

He mentioned that palm oil profit sharing in Jambi Province in 2024 should cover these goals by delivering fund to publish 7 ISPO certificates and 2.500 cultivation documents in the province. The program should also involve social guarantee for 420 labors in smallholders’ plantations in 21 institutions in 7 regencies that got advantages from the program.

“By optimizing palm oil profit sharing fund, Jambi Province would try its best to create positive impacts which are sustainable for planters and people around. Through agrarian reformation and natural resource distribution, it is hoped palm oil sector would be the backbone of inclusive and sustainable economy in Jambi Province,” Agus Rizal said.

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