To Get Better Profits, Ministry of Cooperation Small and Medium Business Encouraged the Smallholders to join in Cooperation

To Get Better Profits, Ministry of Cooperation Small and Medium Business Encouraged the Smallholders to join in Cooperation

InfoSAWIT, JAKARTA – Deputy Assistant of Cooperation Renewal and Development, Ministry of Cooperation Small and Medium Business, Bagus Rachman said, his side encouraged the independent smallholders to join cooperation. The goal is to get profits from their natural resource trade.

That is why involving the people’s business in wider perspective is significant as consideration in order not to get the markets vulnerable nationally because of big stakeholders which tend to get profits when palm oil product price increases in the international level.

“Palm oil corporatization is the policy to realize what is called smallholders’ cooperation. The goal is about to increase their income,” Bagus said in an online discussion with the theme "Atur Ulang Tata Kelola Sawit" that FMB9 (Forum Merdeka Barat9) did, Wednesday (8/6/22).

Bagus mentioned, based on Central Bureau of Statistic (CBS) in 2020, more than 40% palm oil plantations in Indonesia were mastered or cultivated by the smallholders. Unfortunately, many of them did not join the cooperation and did not get the proper profits.

“In its governance, we should discuss the upstream sector. If we see from what CBS released, there were 14,59 million hectares of palm oil plantations in Indonesia," Bagus said, as in the official statement to InfoSAWIT.

He continued, of the total palm oil plantations, about 41% or 6,04 million hectares were cultivated by the people (smallholders). They and theirs were parts away.

That is why, he continued, Ministry of Cooperation Small and Medium Business exists to manage palm oil industrial governance. We could be taken as consolidator for the smallholders. “From our perspective, we have talk about how the independent smallholders should consolidate in a place called cooperation to get better in economy,” Bagus said.

He thought, if they join a cooperation, it could be as aggregator to what the members produced, facilitating the loan needs of the productive members.

In its implementation, the smallholders should sell their fresh fruit bunch (FFB) to the cooperation. The cooperation should process it in their own mill or take partnership with company. The cooperation should also sell their crude palm oil (CPO) production or other products both to export or to the domestic.

Smallholders’ cooperation should make them able to face FFB price fluctuation, do replanting program, get Indonesian Sustainable Palm Oil (ISPO) certificate, increase the better productivity and governance, open market access and deliver capital.

Then, Bagus continued, the cooperation should become a modern one that adopts technology, and could be potential to be in industrial scale. It should have the access to the sources of capital and market to get better added values and deliver bigger advantages for the members by prioritizing the values and principles of the cooperation itself. (T2)