Optimizing Central Kalimantan’s Economy Through Palm Oil Plantation Potential

Palm Oil Magazine
Optimizing Central Kalimantan's Economy Through Palm Oil Plantation Potential. Photo by: Sawit Fest 2021 / Hendra

PALMOILMAGAZINE, PALANGKA RAYA – Palm oil plantations dominate land use in Central Kalimantan, covering an area of 2.3 million hectares, according to data from the Central Kalimantan Investment and One-Stop Integrated Service Office (DPMPTSP) in 2023.

Senator Agustin Teras Narang emphasized that this vast potential must be utilized to improve the regional economy. “From this land area, the provincial government is projected to receive revenue-sharing funds of around Rp23.8 billion in 2025,” Teras said, as quoted by Palmoilmagazine.com from Antara, Tuesday (17/12).

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The total revenue for all 14 regencies and cities in Central Kalimantan could reach Rp117.89 billion. Kotawaringin Timur Regency is expected to receive the largest portion at Rp16.6 billion, while Barito Selatan will receive the smallest at Rp2.56 billion.

Also Read: West Kalimantan Provincial Government and Solidaridad Agree on Strategic Partnership for Sustainable Palm Oil

However, Teras pointed out that the revenue still lags significantly behind the mining sector, which contributes Rp1.79 trillion to the province. “This disparity highlights the need for a thorough analysis to optimize regional income from the plantation sector,” stated the former two-term Governor of Central Kalimantan.

Teras emphasized the importance of downstream palm oil processing to increase economic value. “The production from 2.3 million hectares of oil palm plantations in Central Kalimantan, particularly Crude Palm Oil (CPO) and its derivatives, has significant potential to boost the regional economy and create new jobs,” he explained.

He also stressed the need to evaluate the revenue balance between the central and regional governments derived from natural resources. According to Teras, most revenues still flow more to the central government than to producing regions. “The central government needs to revisit this policy so that regions can benefit more,” he added.

In addition to downstream processing, Teras urged for reinvestment of palm oil production profits to improve the local population’s quality of life. Investments in infrastructure, education, and healthcare must be prioritized in palm oil-producing regions.

“We must ensure that even as palm oil plantations grow, road development, healthcare services, and education systems do not fall behind. These are the rights of local communities that must be fought for,” he said.

Teras called on all stakeholders, including regional governments and private companies, to monitor investments in the sector to ensure they truly benefit the people’s welfare. “This enormous potential must be utilized for regional progress and the prosperity of the people. We cannot afford to be complacent,” he concluded. (P2)

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