JAKARTA – The Indonesian government should seriously watch out the possibility of declining competitiveness of palm oil products in the long term due to the black campaigns which are launched massively and systematically by certain groups at the global market.
Tungkot Sipayung, executive director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), said that the black campaigns are aimed to divert the taste of consumers away from palm oil that will end up eroding palm oil demand, and to increase the production cost of palm oil producers through the pretext of sustainability requirements. He said that besides the palm oil products, the black campaigns are also targeting the forestry products.
“The black campaigns against palm oil products and forestry products have been launched since 1980s, when the plantation products and forestry products started seeing robust growth,” he said recently.
“The consumer taste and production cost are the key factors in the competitiveness of products. These two factors will be always the main target of black campaigns,” he said, adding that the black campaigns are targeting consumers in European countries, China and India.
According to him, there is a fear among producers of other vegetable oils besides the palm oil, such as soybean and sunflower, that it is difficult to compete with the palm oil, which is very efficient due to its low production cost but high productivity and versatility.
“The issues raised in the black campaigns against the palm oil and forestry products are far-fetched and exaggerated. The government and other stakeholders should watch out such campaigns as they will reduce the competitiveness of the Indonesian products at the global market,” said Tungkot.
He cited the example of palm oil free labels on food products as part of the black campaigns. “They also raised the issues of environment, such as diversity, forestry, forest and land fires and exploitation of local people with the aim to vilify the palm oil products at the global market,” he said.
“In short term, there will be no significant impacts of the black campaigns. But in long term the black campaigns will drive the consumers away from palm oil to other vegetable oils. When consumers decide to shun the products, it will be very difficult to get them back,” said Tungkot who earned his PhD from Bogor University of Agriculture (IPB).
Concerning the production cost, he said that a number of NGOs have imposed environmental and social requirements under the pretext of sustainability principles. “They cover up their demands with the sustainability principles. But in fact, their aims are to increase the production cost of palm oil,” he said.
Considering all of the potential impacts to Indonesia’s palm oil products and forestry products, Tungkot asked the government and all palm oil industrial players to take the necessary steps to prevent the long term impacts. “We’ve seen the ‘No Palm Oil’ labels on sale in the local market, and the national and international certification institutions are facing growing pressures on the palm oil,” he said.
He said that one of the NGOs that has been launching the black campaigns is Mighty Earth. “The Mighty Earth has no permit of operation in Indonesia but it is very active in conducting negative campaigns against Indonesia’s palm oil products and forestry products. They cover up their interests with the need to protect the environment and the public interest,” he asserted.
According to him, there are many NGOs operating illegally in Indonesia as they have no permits. “The government has the legality to take any necessary actions against them through the government regulation in lieu of law (Perpu) and law (UU) on mass organizations. The government should be more assertive against them,” said Tungkot.
He said the Mighty Earth is part of the Waxman Strategies, a political lobbyist owned by Henry Waxman, who is a former legislator of the USA.
Kasan Muhri, the head of trade research and development board (BP3) at the trade ministry, concurred with Tungkot, saying that besides the Mighty Earth, other NGOS launching the black campaigns include Greenpeace and the Rainforest Action Network (RAN).
He said the palm oil products are also facing tariff and non-tariff barriers at the global market. “The non-tariff barriers are aimed to weaken the competitiveness of palm oil as the other vegetable oils, such as soybean, sunflower, and rapeseed could not compete with the palm oil head to head due to its efficiency, productivity and versatility,” said Kasan.
Kasan pointed out that the palm oil plays a very significant role in the national economy, with contribution to the non-oil-gas sector amounting to 13.6% in 2020. “Despite Covid-19 pandemic, the palm oil industry is still resilient and strong,” he said. (*)
Source: KONTAN.CO.ID | Featured image via detik.com