JAKARTA – The plantation commodities have become the major contributor to Indonesia’s foreign exchange income, with total exports in 2018 reaching US$28.1 billion or around Rp393.4 trillion. It is expected that the plantations’ contribution to the national economy will increase and further strengthen the development of the whole plantation sub-sector.
“Our plantation commodities have been well known even hundreds of years before the independence of Indonesia. In 18th century, our herbs and spices were highly demanded at the global market, especially European market,” Economic Coordinating Minister Airlangga Hartarto said during a webinar on “Sustainable Oil Palm Smallholders: Halted or Replanted” in Jakarta on Thursday 22 April 2021.
Palm oil as one of the plantation commodities also has a strategic role in Indonesia’s economic development. As the world’s largest producer of palm oil, the palm oil industry has employed a total of 16 million workers, directly and indirectly.
In 2018, Indonesia’s palm oil production reached 48.68 million tons, consisting of 40.57 million tons of crude palm oil (CPO) and 8.11 million tons of palm kernel oil (PKO). The total production is derived from smallholders’ plantations at 16.8 million tons (35 percent), state-owned companies’ (BUMN) plantations at 2.49 million tons (5 percent) and from private companies at 29.39 million tons (60 percent).
He said that Indonesia’s palm oil industry is developed by prioritizing the balance of three strategic development aspects, namely the aspect of economy, social and environment. It is in line with the government’s commitment to implement the sustainable development programs as stipulated in the medium term plan of national development (RPJMN) 2020-2024.
Based on the RPJMN 2020-2024, the sustainable development is prioritized to realize fair and inclusive development, protect environment, and increase the quality of life from one generation to the next generations. “Through the development approach, the Indonesian government is confident that the development of sustainable palm oil will significantly contribute to the realization of the United Nations’ (UN) Sustainable Development Goals (SDGs),” said Airlangga.
Minister Airlangga noted that to accelerate the development of sustainable palm oil, President Joko Widodo (Jokowi) had issued the presidential regulation (Perpres) No.44/2020 on the system of Indonesian Sustainable Palm Oil (ISPO) certification. The Perpres obliges all palm oil industrial players, big companies and smallholders, to get the ISPO certification as a guarantee that they implement the principle of sustainability in their palm oil production.
The government is committed to implementing the program of replanting 180,000 hectares of oil palm plantations owned by smallholders in 2021. It is particularly aimed at increasing the productivity and sustainability of smallholders. (*)