The Problems (Malakama) in Palm Oil

The Problems (Malakama) in Palm Oil

InfoSAWIT, JAKARTA –The cheaper crude palm oil (CPO) in the early of 2016 to the midst of 2017 became the reason for the government and the stakeholders to realize export citation or famously known as Crude palm oil Supporting Fund (CSF). It is collected from every CPO and derivative export to develop palm oil industries nationally.

In the end, Public Service Agency was made in May 2017 within the name Badan Pengelola Dana Perkebunan Kelapa Sawit (BPDP-KS) or Palm oil Plantation Fund Management Agency (PFMA). The Agency should get or make new markets in the domestic to increase palm oil biodiesel demands as the most prepared industries to absorb CPO when the world demands decreased. It was hoped to increase the price.

Besides Coordinator Ministry in Economy at the time promised that this pattern would make the fresh fruit bunch (FFB) better in the smallholders’ level. Of course, the promise became the modal that the smallholders trusted.

One year after the program run, the pattern that made palm oil biodiesel incentive reaching 90% of the total collected fund, reached about Rp 10 billion (incentive period 2015-2017). It was running well.

But in the second year, the smallholders’ FFB was not expensive (better). If it was better, it was only about 1% to 2%. There was no certain period to have better price. The FFB price was always corrected.

It is normal that the smallholders insisted to equalize the fund, to fund the people’s replanting program, empower the smallholders’ institutions, and increase capacity of human resources. In the end, the incentive portion for the biodiesel was cut, only 70% in 2018 while the portion for replanting program increases to be 22%.


Though the portion changes, the institution is still criticized. In 2016, Corruption Eradication Commission (CEC) started to trace the biodiesel incentive pattern that might be mistaken. It was assumed that only 5 (five) big corporates got the fund from CPO export citation while the people’s palm oil was not normally developed. What about the study of the CEC?


Besides discussing the study of CEC to palm oil industries nationally, in the early of this year, the financiers or banks should contribute to support the social and environmental palm oil cultivation.


It is said, Otoritas Jasa Keuangan (OJK) obliged that every bank should make the conditions of green development to fund the commodity sectors.


But lots of banks do not obey the policy. Some palm oil industries have adopted No Deforestation, No Peatland dan No Exploitation (NDPE) policy. Willing or not, the upstream industries should implement the sustainable practices and the banks as the financiers should also run it and realize the hope.


To know more about the issues, dear readers could read in InfoSAWIT Magazine, January 2018.(T2)


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