Ministry of Agriculture Issues Guidelines for Palm Oil Companies to Support Local Community Plantations

Palm Oil Magazine
Heru Tri Widarto, Director General of Plantations Ministy of Agriculture. Photo by: Special

PALMOILMAGAZINE, JAKARTA – The Ministry of Agriculture, through the Directorate General of Plantations, has issued Circular Letter No. 21/SE/PI.400/E/01/2025 regarding the Fulfillment of Obligations for Facilitating the Development of Local Community Plantations (FPKMS) through Productive Business Activities. This policy reinforces the obligation of plantation companies to support surrounding communities by developing plantations or other forms of productive ventures.

The circular refers to Ministry of Agriculture Regulation No. 18 of 2021, which mandates plantation companies to facilitate the development of local community plantations, constituting 20% of the total area of their operational licenses. This requirement was previously emphasized in the Director General of Plantations Decree No. 152/Kpts/HK.160/12/2023 and the Director General of Plantations Circular Letter No. B-347/KB.410/E/07/2023.

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However, the implementation of this obligation has often been hindered by the limited availability of land around plantation areas. As a solution, the new policy allows companies to fulfill their obligations through other forms of partnership, such as productive business activities.

Also Read: Indonesia’s Palm Oil Entrepreneurs’ Association Officially Established to Promote Sustainable Palm Oil Industry

Under this circular, companies are given the flexibility to collaborate with local communities in cultivating plantation commodities or other crops, including rice, in line with the government’s food self-sufficiency programs. Forms of partnership activities include providing seeds, planting and maintaining crops, supplying fertilizers, controlling pests and plant diseases, providing labor, and developing and maintaining infrastructure.

The circular also serves as a guide for governors, regents, and mayors to supervise and ensure companies’ compliance with the FPKMS obligations. Acting Director General of Plantations, Heru Tri Widarto, who signed the circular on January 8, 2025, emphasized the importance of implementing FPKMS through productive business activities to create tangible benefits for local communities.

“This circular aims to ensure plantation companies fulfill their FPKMS obligations while promoting the economic development of local communities through productive business activities,” the circular states, as reported by Palmoilmagazine.com on Friday, January 10, 2025.

This policy is expected to address land constraints faced by companies and promote economic equality in plantation areas. Through productive partnerships, local communities can directly benefit from the presence of plantation companies in their regions.

The new policy reflects the government’s commitment to integrating sustainability, justice, and community empowerment in the governance of plantations in Indonesia. (P2)

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