The palm oil commodity has permeated deeper into the lives of Indonesian people. Due to its strategic role, its management could no longer be just based on its business interest.
Dr Tungkot Sipayung, the Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI) has stated that despite harming the business interest of palm oil producers, the recent decision of President Joko Widodo (Jokowi) to ban the exports of crude palm oil (CPO) and derivative products should be seen from a wider perspective. “Indonesia can no longer design its palm oil policy based on just economic goal to maximize business profit. Equally important is the need to maximize the social function of the palm oil commodity itself in this country,” he said.
“Based on the President’s view, the palm oil should be also developed to maximize the social welfare. The national common interest should be more prioritized than the business interest of producers. Looking forward, we need to reformulate our palm oil policy. We haven’t yet done this,” Tungkot told the participants of a palm oil symposium, which was organized by the PASPI, the agricultural engineering faculty of Gajah Mada University (UGM), the Indonesian Palm Oil Society (MAKSI), and Yogyakarta Institute of Plantations (INSTIPER) in Yogyakarta on Saturday, 14 May 2022.
He reminded that Indonesia is both the largest producer and largest consumer in the world. Considering the fact, its policy should not be just limited on business profitability, but should also cover on the country’s social welfare.
“How we can design the policy on its distribution, stabilization of cooking oil that benefit all consumers, producers and the government. This is not an easy task,” he said.
According to him, such policy instrument has been actually implemented by the government through the palm oil export levy. “Through this policy the government can control the stock of cooking oil at domestic market. If the price gets higher at global market it can function to control export,” he said.
But for long term, Tungkot proposed the existence of a state-owned company (BUMN) which specializes on such function. “For example, to stabilize the cooking oil, we just assign the BUMN, without burdening the businessmen. I think our state-owned plantation company PTPN should be allowed to play bigger role as a government tool in stabilizing the cooking oil at domestic market,” he asserted.
Farmers’ capacity
Dr Harsawardana, the Rector of the plantation institute of INSTIPER Yogyakarta, underlined the importance of improving the capacity of oil palm smallholders. “This requires a development of the farmers’ institutions. Through the well-managed institutions, all stakeholders, particularly the big companies and the smallholders can strengthen their synergy in cultivating and managing the oil palm plantations in the upstream sector,” he said.
According to him, without the existence of the institutions among the farmers, the development of human resources and technology needed in the upstream sector will be slow.
“In addition to that, the government should also design policy on development of on-farm sector, which is directed to support the development of agro-based industries,” he said. (*)
Source: voaindonesia.com / ugm.ac.id | Featured image via moderndiplomacy.eu
