JAKARTA – The Indonesian Palm Oil Association (GAPKI) has positively welcomed the formation of the Plantation Fund Management Board (BPDP) as a replacement of the Oil Palm Plantation Fund Management Board (BPDPKS), saying that the newly-established institution can still financially support the Indonesian palm oil industries provided that the funds it collected from the palm oil industries through export levies are well managed.
“As long as the management of palm oil fund is not affected, GAPKI sees no significant threat to the palm oil industries,” GAPKI Chairman Eddy Martono said in a press statement on Monday (28/10/2024).
Established by the government under President Joko Widodo (Jokowi) based on presidential regulation (Perpres) No.132/2024, which was signed by President Jokowi on 18 October 2024, two days before the transfer of administration to President Prabowo Subianto and Vice President Gibran Rakabuming Raka, the BPDP has its authority expanded from just palm oil commodity to also cocoa and coconut. It is assigned to collect funds from plantations, mainly oil palm, cocoa, and coconut.
Previously, the BPDPKS was authorized to collect palm oil funds through export levies, which are used to finance the palm oil program development, including implementation of biodiesel mandatory program and replanting program for oil palm smallholders’ plantations.
The funds collected by BPDP will be used to develop plantations’ human resources, research and development, promotions, replanting, and development of supporting infrastructure and facilities for plantations.
Eddy admitted that they are not yet confirmed whether the export levy scheme for cocoa and coconut oil will be applied the same with that of palm oil. “Considering that, there should be a further assessment that involves all industry players and BPDP,” he said.
Eddy Martono said that Indonesia’s palm oil sector still needs quite large funding for the implementation of various programs, which include replanting of smallholders’ plantations, biodiesel incentives, and research and development.
He said that as the palm oil industries are facing the problem of stagnant production, the implementation of replanting program should be the main priority. The replanting is expected to raise national palm oil production, which is necessary to maintain Indonesian position as the world’s palm oil largest producer and consumer and to meet the rising need at the global market and domestic market.
According to him, the production increase is also necessary to support the government’s plan to upgrade the biodiesel mandatory program from the current biodiesel 35% (B35) to B40 in 2025 and to B50 in 2026.
Concerning the formation of BPDP, the BPDPKS’ Corporate Division Head Achmad Maulizal Sutawijaya confirmed that BPDPKS will be replaced by BPDP, which will not only manage palm oil, but also cocoa and coconut oil. Based on the Perpres 132/2024, the inauguration of BPDP will be conducted no later than three months after the issuance of the Perpres. (*)
