JAKARTA – Indonesian Ombudsman has sent a letter to President Prabowo Subianto, asking for the establishment of a national palm oil board to improve the governance of palm oil industries in the country.
The Ombudsman Committee Member Yeka Hendra Fatika said the formation of the national palm oil board should become an integrated solution to the problems in Indonesian palm oil industries. “If managed accountably, the existence of a national palm oil board will provide additional state income of Rp650 trillion,” he said.
According to him, if Indonesia wants to optimize the contribution of palm oil industries to national economy, then it is now time for the country to have a national palm oil board, which manages the palm industries from upstream to downstream.
Yeka said that the additional state income of Rp650 trillion can be derived from the increase of productivity, crude palm oil (CPO) price, increase of taxes from palm oil. The board will also help tackle the problems related to deforestation.
“Based on data from the finance ministry, the contribution of palm oil industries to APBN (state budget) 2023 reached around Rp88 trillion. It consists of taxes at Rp50.2 trillion, PNBP (non-tax state income) at Rp32.4 trillion and export tax at Rp6.1 trillion,” he said.
He said that the national palm oil board is proposed under President. With such position, it should have the authority to eliminate the condition of overlapping regulations, which were issued by ministries and institutions—including agriculture ministry, industry ministry, forestry ministry, and agrarian and spatial planning ministry (ATR/BPN).
“We can learn from the success of Malaysia Palm Oil Board (MPOB), which is able to manage the palm oil industries in Malaysia efficiently and integratedly, despite its palm plantation areas are much less than Indonesia’s. But the result is the fact that productivity and prices of fresh fruit bunches (FFB) in Malaysia are higher and more stable,” Yeka said.
The Ombudsman member highlighted a number of urgent problems facing the palm oil industries in Indonesia. “One of the problems is the low productivity of smallholders’ oil palm plantations at only 8 – 10 tons per hectare, which is way below the maximum potential of 19 – 20 tons per hectare. Such low productivity was mainly caused by the poor quality of their palm seeds,” he concluded. (*)
