PALMOILMAGAZINE, JAKARTA – The Indonesian government is currently grappling with significant challenges in managing palm oil production to ensure sufficient supply for both energy and food needs. Kacuk Sumarto, Chairman of Rumah Sawit Indonesia (RSI), emphasized the importance of adjusting policies to achieve the right balance.
In 2023, palm oil production reached approximately 52.53 million tons, but this volume may not be adequate to meet both energy and food demands simultaneously. Sumarto believes that integrating food and energy needs will require careful and strategic policy decisions.
“We have to carefully calculate how much would be allocated for energy and food. This is about not to raise issue about rareness in one of the two sectors,” he said.
Also Read: Palm Oil Industries in Indonesia: Balancing Economic Contributions and Environmental Concerns
Palm oil biodiesel program (50/50) that the government has planned, is now becoming the topic. Kacuk thought, the increasing needs for energy sector would minimize palm oil production allocation for food sectors and eventually would make the food sectors more expensive
“The increasing needs for energy sector would minimize the allocation for food sectors. This could increase the price,” he said when becoming a speaker in a webinar Palmoilmagazine.comjoined, Sunday (14/7/2024).
He also reminded that palm oil exports would have something to do with the policy/program. The more palm oil used for biodiesel program, the less would be exported. The levy would be decreasing. “Levy from palm oil exports that Palm Oil Plantation Funa Management Agency (PFMA) manages would be less if the exports decrease,” Kacuk said.
The decreasing levy would deliver impacts for many sectors that depend on the fund, such as, human resource development, infrastructures. “Biodiesel subsidy would need lots of numbers. If the levy got decreased, the fund for others, such as, human resource development and infrastructures, would be too,” he said.
He also reminded it would need balancing policy between domestic and international scale needs. For crude palm oil could be more expensive in international scale, the local producer should also confirm that the domestic supply would remain stable and it is not too expensive. “The government has to re-calculate the subsidy needed. This is about to make sure everything would be enough from every published policy,” he said.
In facing the challenges, RSI would be ready to cooperate with the government to formulate sustainable policies for palm oil industries in Indonesia. “We are ready to be the partner of the government to calculate and formulate every policy about biodiesel and subsidy needed,” Kacuk said. (P2)
