JAKARTA – The palm oil industry in Indonesia has been growing for more than 110 years. Currently, Indonesia is the world’s largest producer, exporter and consumer of the palm oil.
Every year, Indonesia produces around 45 million tons of palm oil from its total acreage of oil palm plantations at more than 16 million hectares.
“Indonesian palm oil industry has many advantages if compared to other industries. The advantages include its good industrial structure and ownership balance between big companies and smallholders,” the palm oil agribusiness strategic policy institute (PASPI), an independent research institution, said in a report recently.
Based data from PASPI, the smallholders control around 41 percent of the total acreage of Indonesia’s oil palm plantations and contribute around 37 percent of the national production of palm oil, while the big companies control 59 percent of total acreage and 63 percent of total national production.
The palm oil is also the most productive and most efficient vegetable oil among other vegetable oils in the world, such as soybean, rapeseed, and sunflower. Accounting for only 6.0 percent of the total plantation acreage of the global vegetable oils, the palm oil dominates the global market with 54 percent market share.
“There are only a few industries which have the special characteristics like those of the palm oil industry,” PASPI reported.
According to the PASPI report, the oil and gas industry is perhaps an important industry if considered its contribution to the national economy, but it could not emulate the palm oil industry in terms of absorbing workers and eradicating poverty.
Actually, the small and medium businesses play a very important role in absorbing workers, but its contribution to the national economic growth and state income is relatively low compared to other industries, especially the palm oil industry.
“Considering all the facts, then the palm oil industry is a very effective instrument in spurring economic growth and driving income distribution among the public,” PASPI reports. (*)
Source: Wartaekonomi.co.id | Featured image via palmoillabour.network
