JAKARTA – The Indonesian Palm oil Association (GAPKI) said that there are two homework assignments that the industry players are now dealing with to improve the performance of the Indonesian top industry in the long term. The two homework assignments are the program to increase productivity and the program of replanting the already old oil palm plantations.

GAPKI Deputy Chairman Togar Sitanggang said that currently more than 40 percent of Indonesia’s oil palm plantations are owned by smallholders who develop their plantations self-sufficiently but with low productivity.

Despite higher productivity of big private companies, the smallholders’ low productivity has weighed down the national productivity to the level much lower than those of other palm oil producing countries, such as Malaysia, which is the main competitor Indonesia at the global market. According to Togar, such condition should encourage the government to pursue a long term effort to improve the national productivity.

He said that one way to raise the productivity is through the massive implementation of the replanting program in all palm oil producing areas across Indonesia.

“Such efforts will cut national production in short term as it will require the cutting of the old ones. But in long term, it will certainly increase national productivity,” Togar said on Monday, 14 February 2022.

According to him, for the self-sufficient smallholders across Indonesia, the replanting program will be more effective if it is implemented by the government. But for smallholders who were bound with plantation companies under the nucleus estate smallholders (NES) scheme, the replanting program can be implemented with a cooperation with the plantation companies.

Separately, PT Nusantara Sawit Sejahtera (NSS) Vice President Director Kurniadi Patriawan said that they are committed to supporting the government to increase the productivity of oil palm plantations owned by smallholders — those integrated under the NES scheme and the independent ones.

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