Smallholders Support FFB Has no Tax to be Better

Smallholders Support FFB Has no Tax to be Better


Palmoilmagazine, JAKARTA – To get smallholders’ fresh fruit bunch (FFB) more expensive, the government through Ministry of Finance published the Regulation of Minister of Finance (RMF) Number 115/PMK.05/2022 about the Substitution of RMF Number 103/PMK.05/2022 about Public Service Obligation on Palm Oil Plantation Fund Management Agency (PFMA) in Ministry of Finance.

In the revision, every export tax (levy) that PFMA managed for every product from crude palm oil (CPO) and its derivative is zero. This would be temporary since it was announced on 15 July 2022 to 31 August 2022.  

Since 1 September 2022, it would be back to normal within the maximal tariff at US$ 240/ton for CPO which is more than US$ 1500/ton within advalorem tariff change which is price progressive.

What the government does, is responded by the smallholders joining in Persatuan Organisasi Petani Sawit Indonesia (POPSI) which consists of Asosiasi Petani Kelapa Sawit Indonesia – Perjuangan (Apkasindo – Perjuangan); Serikat Petani Kelapa Sawit (SPKS); Asosiasi Petani Kelapa Sawit Perkebunan Inti Rakyat (Aspek - PIR); Jaringan Petani Sawit Berkelanjutan Indonesia (Japsbi); Jaringan Petani Sawit Nasional.

Chairman of POPSI, Pahala Sibuea said, the temporary tax delation which would be available until 31 August 2022 should be watched out because the policy system should actually be discussed deeply by taking smallholders who got the direct impact by a policy published.

“Do not realize before export citation (levy) and Out Fee should be improved in the first place and we should be taken to discuss how to implement the levy and Out Fee in order not to burden the smallholders,” he said in the press conference of POPSI which InfoSAWIT facilitated on Wednesday (20/7/2022) in Jakarta.

Chairman of Aspekpir, Setiyono said, the smallholders are in misery but without blaming the government for its policy published. Prior, the same thing happened in 2008 but this time is different. FFB was Rp 4.000/kg but now it is about Rp 400/Kg.

“We knew, this happened in 2008 but this is more critical because it is assumed, some companies took advantage for this situation, namely palm cooking oil companies,” he said. He continued, about palm cooking oil, it could be helped by delivering bantuan langsung tunai (BLT) to the people in order to block the fraud. If a product or goods gets subsidy, it would be no more or disappear in the markets.

Serikat Petani kelapa Sawit (SPKS) monitored in 14 districts and 5 provinces, smallholders’ FFB gets much cheaper. Head of Organization and Membership, SPKS, Sabarudin said, the temporary export levy deletion based on RMF Number 115/2022 could not mean a solution to make smallholders’ FFB more expensive.

He thought, SPKS is launching a digital petition to revoke export levy and Out Fee of CPO. He continued the revocation could be too late because the FFB is less than Rp 1.000/kg. “In fact, smallholders’ plantation governance is not noticed anymore. In addition, Indonesian Sustainable Palm Oil (ISPO) also needs supports from the smallholders,” he said.

He also reminded palm oil governance should be noticed. Coordinator Ministry in Economy, Ministry of Agriculture should calculate the numbers of tax to normalize FFB price. “This should be the evaluation point to implement the levy,” Sabarudin said.

The analysis delivered by Suaduon Sitorus of Jaringan Petani Sawit Nasional revealed that to recover FFB price, at least, there are two steps for the government to conduct. The first, normalize the market chain because CPO stock buffer is always the reason to publish kinds of policies. To solve it, it needs to revoke domestic market obligation, domestic price obligation, flush out, and export levy.

The second, the government should deliver incentive for the exporters by reducing Out Fee numbers. What the government is doing is not the best solution because in RMF Number 115/2022, levy deletion is available until 31 August 2022 only, but per September 2022 it would be back to normal and the numbers would be US$ 240.

He continued, the regulation would be dangerous because the deletion also confirms to escalate more citation which was only US$ 200/ton and will be US$ 240/ton.

“The stakeholders would respond it by not escalating the FFB. We think, this is male-female solution,” he said.

He continued, the smallholders who are not familiar with levy deletion would be thinking that it is a hope. “We hope, every association should have the same vision of struggle and claim that the government should be serious to what the smallholders face,” he said.

Chairman of Apkasindo Perjuangan, Alvian Rahman told, FFB gets much cheaper in the past three months. “The smallholders get losses for the incorrect policies,” he said.

When CPO and its derivative exports were banned on 28 April 2022, FFB got drastically cheaper. The planters did panic and impact to the smallholders’ economy because many depend on palm oil.

He continued the solution should be by CPO exports in phase. Per July 2022, the CPO stock could be 8 million ton. “If the exports run at once, this would make CPO get cheaper in the globe,” he said. It needs to evaluate the numbers of Out Fee and levy. Looking back to other countries, in this condition, they got lower export tax, for instance, Thailand which is only about 7%, Malaysia about 3%, Vietnam about 13%, “Indonesia gets the tax up to 60%,” Alvian said. (T2)


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