JAKARTA – The government will keep trying to strengthen partnerships between palm oil companies and smallholders to increase their global competitiveness. Its community plantation development facility (FPKM) is one of the policies it has implemented to realize it.
The FPKM is the new partnership scheme applied by the government after the end of the old schemes, such as the nucleus estate and smallholder scheme for plantations (PIR-Bun), the nucleus estate and smallholder scheme for transmigration (PIR-Trans), the nucleus estate and smallholder scheme for members of primary cooperatives and the estate crop revitalization program (Revitalisasi program – RevitBun).
“The previous programs of oil palm plantation development for smallholders ended in 2005. But the success of the plantation development has proven to be the best solution in improving the public welfare and in maintaining a good relationship between the palm oil companies and the people living around the plantations,” Heru Tri Widarto, the secretary of plantation directorate general at the agriculture ministry, said during a virtual discussion on strengthening oil palm partnerships through the FPKM, which was organized by the Forum of Agriculture Journalists (Forwatan) in Jakarta on Friday, 26 May 2023.
The discussion was also addressed by the Association of Indonesian Oil Palm Smallholders’ (APKASINDO) Secretary General Dr. Rino Afrino, the Indonesian Palm Oil Association’s (GAPKI) Replanting Policy and Socialization Department Head Muhammad Iqbal.
Heru said that the oil palm companies started implementing the FPKM scheme since the issuance of the agriculture minister regulation (Permentan) No.26/2007 on guidelines of plantation licensing, which has been revised through the Permentan No.98/2013 as an implementing regulation of the law (UU) No.39/2004 on plantations that has been revised through UU No.6/2023 to strengthen the legality of Perpu No.2/2022 on job creation.
Based on the new regulation, there are three stages for the oil palm companies to implement the FPKM. The first stage is for the oil palm companies which have plantation licenses before 28 February 2007. For companies that have implemented the partnerships through the schemes of PIR-BUN, PIR-TRANS, PIR-KKPA or others are considered to have implemented the FPKM and are no longer obliged to implement it.
The second stage is implemented by oil palm companies which have their permits during the period between 28 February 2007 and 2 November 2020. In this second stage, the government gives privileges by considering the availability of lands, number of families eligible as participants of the partnerships, and agreements between oil palm companies and the local communities.
“If there is no land for the implementation of FPKM, then the oil palm companies and the local communities should find other right businesses to be developed,” said Heru.
The next stage is aimed for oil palm companies which have their permits after 02 November 2020. Companies whose all or part of their plantation areas are originated from areas for other uses (APL), outside of the cultivation rights (HGU) and clearance of forest areas, are obliged to implement the FPKM. The companies are obliged to facilitate the development of such plantations at around 20% of their plantation acreage under the partnerships with the local communities.
Based on Permentan No.18/2021 on the FPKM, oil palm companies are given various options of partnerships under the schemes of credit, production sharing, other financing schemes agreed by stakeholders and other schemes of partnerships.
Muhammad Iqbal, Head of Replanting Policy and Socialization Division at the Indonesian Palm Oil Association (GAPKI), said that GAPKI supports the government regulations on the FPKM as it can increase the smallholders’ income, the quality of their plantations, and guarantee of purchasing their fresh fruit bunches (FFB) by the oil palm companies.
Such partnerships will allow their plantations to be managed more professionally, open new opportunities, and strengthen solidarity among the palm oil industry players.
Rino Afrino, Secretary General of APKASINDO, said that many partnerships are no longer in operation, despite the fact that the partnerships can help tackle the challenges of implementing the sustainability principles economically, socially and environmentally. It also includes the fulfillment of companies’ obligation to facilitate the development of 20% of their plantation acreage under the FPKM after the extension of their cultivation rights (HGU).
“It’s impossible for smallholders in the upstream palm oil industry not to partner with companies in producing FFB. The partnerships should be sustainable to realize sustainable palm oil,” said Rino.
The end of the partnerships is reflected by the different stances of companies, smallholders and cooperatives regarding the implementation of the partnerships. The smallholders have their own concept of partnerships, while the companies and cooperatives also have their own concepts of partnerships.
“I believe that partnerships between companies and smallholders are the only way to increase their productivity and welfare. But all stakeholders should have a strong commitment and morality, while related institutions should conduct good supervision and fostering for better achievements,” he said. (*)
Source: WartaTani.co
