JAKARTA – The Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono said that a number of factors have discouraged the oil palm smallholders to join replanting program, causing realization of the replanting never meets the target.

First, Eddy said, their plantations were included in forest areas as a result of overlapping regulations. The replanting program only applies for oil palm plantations excluded from forests. As a result, the overlapping condition made them ineligible to join the replanting program.

Second, the low grant funding for replanting as it is only Rp30 million per hectare provided by the government. It is estimated that the cost of replanting is around Rp70 million per hectare.

“As a result, the smallholders are reluctant to cut their palm trees. They fear that after cutting them they will lose their income, despite being small due to their already low productivity,” Eddy told Kontan.co.id on Sunday (31/03/2024).

He said GAPKI warmly welcomed the recent decision of the government to double the replanting fund from Rp 30 million to Rp60 million per hectare. In addition to that, the government has also decided to streamline the procedures of applying for joining the replanting program from 6 stages to only 3 stages. “With the increase of funding and easier application, we hope smallholders will be enthusiastic in implementing the replanting program,” said Eddy.

Previously, Economic Coordinating Minister Airlangga Hartarto admitted that the implementation of replanting for smallholders’ plantations is still below expectation.

He said the realization of replanting program so far is only 50,000 hectares every year since the program started in 2016.

“It’s less than 30% of the target set at that time by President at 180,000 hectares per year,” Minister Airlangga said during a conference of national actions for sustainable oil palm plantations in Jakarta on Thursday (28/03/2024).

According to him, until now the total realization of replanting program is only 331,007 hectares. It is far below the target which was initially set at 180,000 hectares per year across the 21 palm oil producing provinces.

The oil palm plantation fund management board (BPDPKS), which is assigned by the government to collect palm oil fund through export levies and manages the fund for development of the palm oil industries in Indonesia, has disbursed a total fund of Rp9.25 trillion for the replanting program since 2016. (*)

Source: KONTAN.CO.ID