PALMOILMAGAZINE, JAKARTA – As the world’s largest palm oil producer, Indonesia holds significant responsibility for optimizing plantation productivity, a key pillar of the national economy. Unfortunately, the average palm oil plantation productivity currently stands at just 3.8 tons per hectare, far below the ideal target of 6.5 tons per hectare. With the moratorium on new plantings in place, replanting programs and the implementation of good agricultural practices (GAP) have become essential to improving plantation productivity.
Smallholder plantations, which account for approximately 6.94 million hectares, play a critical role in the palm oil supply chain. The local communities’ reliance on the palm oil industry for employment underscores the importance of boosting productivity to enhance smallholders’ economic well-being.
Achieving this goal requires strong support from both the government and the private sector. Access to high-quality seeds, education on GAP, and technical assistance are crucial. The government should leverage ongoing replanting programs and ensure they are more responsive to the specific needs of smallholders to drive sustainable growth in the sector.
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Besides palm oil, coconut would also play the significant roles in the economy of Indonesia, namely in the people’s plantation sector. Even though the coconut plantations laid on about 3,39 million hectares, the productivity just reached about 1,11 tons per hectare. This gets more irony when the coconut farmers’ economy is beyond expectation. The coconut is always cheaper than the standard one.
The cheap coconut in the farmers’ level showed that the supply chain and its governance would significantly need reformation. The integration between the production centers and coconut industrial facilities should be realized so the supply chain would be more efficient and directly delivering impacts namely to its price for the farmers.
Coconut sector should get innovations by involving the corporates to reinforce downstream products to deliver additional values. It needs to get research and development in this sector to produce downstream products to be more competitive in price.
Coconut industries should be developed by having integrated program with the materials, logistic, and business process. This would provide employments, escalate the farmers’ welfare, and significantly contribute to the economy nationally.
Indonesia would have the potential to make palm oil and coconut as the sustainable bio-industrial commodities namely with the support of productivity and replanting policies. The success would need the collaboration from every stakeholder, such as, the governments, the private sectors, and the smallholders. It means, palm oil and coconut could be the base of economy and energy security to increase the smallholders and farmers’ welfare in this country.
And so does cocoa (Theobroma cacao L.) which becomes the mainstay commodity for Indonesia. It could potentially be the source of exchange nationally. Even though Indonesia is still the third biggest cocoa producer in the world after Ivory d coast, and Ghana, Indonesia still faces the big challenges to increase cocoa production and quality. “For cocoa plantations laid on about 1,73 million hectares and the annual production just reached about 713.400 tons, cocoa plantations were cultivated by the people that contributed 99,3% of the production nationally.
The issues in the upstream sector maximally postponed the cocoa production. Many cocoa plantations in Indonesia got old and planting the superior clone was limited still. The cocoa production is low in quality because of the unwell – cultivation and also the pest and disease attacks. To solve these, it needs to get replanting program and adopt good agricultural technic, such as, good agricultural practices (GAP) as the key. The government should also prioritize and provide superior cocoa seeds and also deliver trainings for the smallholders and counselors.
Cocoa plantations would be massively developing in Indonesia namely in the eastern ones. They have the good wide plantations to develop it. even though there would be workers to work, it needs to increase their skills to escalate the cocoa productivity. Besides, the cocoa factories in this county would need high quality production. On the other hand, even though cocoa products from Indonesia could compete in the globe, we have to escalate the cocoa seed quality namely if Indonesia would compete in cocoa exports.
The government itself has published the policy to escalate cocoa quality and productivity through BUN500 program. It was about to provide cocoa superior seeds, get holistically approaches to increase the quality that should start from post – harvest technology implementation to develop the downstream industries. For having the cocoa product exports, the government has to establish micro, small, and medium businesses in chocolate industries in cocoa – base to escalate the additional values for the farmers themselves.
Unfortunately, the decreasing cocoa supply in this country and the export dependence that reached 84% showed that cocoa was not taken for advantages maximally, or only about 16%. Meanwhile the consumption per capita in Indonesia was still left behind to other countries. By the increasing middle class – economy, cocoa consumption should be increasing as same as the changing life style of the society.
In the diplomacy program, Indonesia should reinforce its position in the world. The cooperation with European Union through Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) would be the significant thing to minimize cocoa import tariff from Indonesia to Europe. Besides, it needs to get Indonesia national standard for cocoa products to maintain its quality and be the specific reference for cocoa industries technically.
In the big scale, these would determine the sustainability in cocoa sectors in this country. By implementing the right strategies, not only cocoa production would be increasing but also the cocoa farmers qualify of life and the cocoa competition would be too in the globe. The transformation in cocoa sector would need the synergy among the government, smallholders, industries, and investors to be more powerful and sustainable.
Support The Strategic Commodity Development
The publication of President’s Regulation (PR) Number 132 / 2024 about Plantation Fund Management Agency (PFMA) would be the ‘fresh news’ for the three commodities as the strategic ones for Indonesia – palm oil, coconut, and cocoa.
The regulation would open the chance to increase the quality and sustainability in plantation sectors by establishing PFMA that would manage the fund from many sources, including the contribution of the stakeholders, financial institutions, and the people. By having the financing, it is hoped, there would be replanting program, commodity research, and providing environmental fuel materials.
Chapter 11 of PR 132/2024 regulates the detail of fund allocations to many significant aspects, such as, human resource development, research and promotion of commodities, replanting, and developing the supporting infrastructures. With the fund allocation supports, plantation sectors would focus not only in the production but also would support food and new renewable energy sectors through vegetable fuel. These would be the same with the commitment of Indonesia to realize sustainability and energy security in national scale in resource – bases.
But the implementation of fund management should also confirm that there would be justice among the commodities. The fund management per commodity should be the crucial thing so there would be no gap that could raise unsatisfaction among the stakeholders and smallholders/farmers themselves. Every commodity both palm oil, cocoa, and coconut, has its own development methods and specific challenges. These would need the different approaches. The fund distribution clearly and transparently that PFMA would manage, would be the significant test to succeed the regulation itself.
By the new regulation, it would need the support from every stakeholder. PR 132/2024 would deliver not only new hope to develop plantation sectors but also offer the development frames in wider scales. If everything is well managed, the fund would open the chances for smallholders/farmers to get involve in bigger supply chain, escalate the productivity nationally, reinforce the position of Indonesia as the strategic commodities producer in the globe.
The sustainability aspect in the PR would need the same supports to the future of plantation industries to be stronger and more competitive. (*)
By: Delima Asri Azhari/Chairwoman of Gabungan Perusahaan Perkebunan Indonesia (GPPI)
