JAKARTA – Tens of millions of people in Indonesia, mostly small-farmers, are very dependent on the palm oil industry. With such pivotal role, any attacks against the palm oil industry will mean cutting off the livelihoods of the smallholders, workers and their families.
The economic coordinating ministry’s Deputy In Charge of Food and Agribusiness Coordination, Musdhalifah Machmud said recently that besides contributing very significantly to the national economy of Indonesia, the palm oil industry employs more than 19.5 million people and involves around 2.6 million small-farmers.
“All of the palm oil industries from upstream to downstream are labor intensive in nature, enabling the maximum employment of workers directly and indirectly,” she said recently when addressing the webinar on ‘Sustainable Palm Oil Development in Indonesia”.
“From year to year, job opportunities in the palm oil industry have been consistently increasing. Data during the period of 2011 – 2018 shows that direct employment in the palm oil industry increased from around 3.65 million workers in 2011 to around 7.48 million workers in 2018. Currently, indirect employment in the industry reached around 12 million people,” she said.
According to her, the data also excluded the 2.6 smallholders who directly and indirectly provide job opportunities for 4.3 million people of Indonesia.
She noted that due to the development of palm oil industry around 10 million of Indonesian people, who involve in the industry, can be lifted from poverty since the year 2000. There are also around 1.3 million of Indonesians who were lifted from poverty due to the positive contribution of the palm oil industry.
In terms of its economic contribution, the palm oil industry has been playing a very significant role to the national economy of Indonesia, especially during the outbreak of Covid-19 pandemic, which has disrupted almost all economic sectors, except some sectors that include the palm oil industry. In 2018, the exports of Indonesian palm oil reached US$21 billion, or 3.5% of national GDP, making Indonesian trade balance positive and reducing inflation by 1.75%.
She pointed out that the palm oil has also contributed to the government’s efforts to strengthen its energy resilience, by producing palm-oil based biofuel, a renewable energy source that will help protect the environment as it will certainly reduce the carbon emission in the country. (*)