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FFB Price Decision in Riau: To Protect Smallholders and Encourage Partnership

Doc. InfoSAWIT
FFB Price Decision in Riau: To Protect Smallholders and Encourage Partnership

InfoSAWIT, PEKANBARU - Riau is one province as the biggest palm oil barn in Indonesia. It has done proactive thing to protect smallholders and the people by deciding fresh fruit bunch (FFB) price.

Prior Riau only decided one FFB price for plasma smallholders but in the early of this year, the policy has been expanded by deciding two prices – one for plasma and the other for independent smallholders.

Head of Marketing and Processing Plantation Agency Riau Province, Defris Hatmajaya said that the price decision significantly delivered impacts. The smallholders get guarantee from it. Before having two price decisions, the smallholders got different prices about 500 - 700 rupiah per kilogram between the two kinds of smallholders. Defris also mentioned that FFB price decision in Riau covers shell price.

Many smallholders were frustrated because they did not get good price from the official decision. Though FFB that Plantation Agency of Riau Province decided up to Rp 2.500 per kilogram, the smallholders got less than Rp 2.000 per kilogram. To solve this, the provincial government encouraged partnership. They also monitored the people’s complaint about FFB price.

Defris Hatmajaya also emphasized, it is important for the smallholders to get partnership with the company (ies), namely mills that have not palm oil plantations. In the cooperation, the company (ies) are obliged to get 80% of material from smallholders. “If the company breaks it, they would get sanctions and their permits would get revoked,” Defris said in an event in Riau InfoSAWIT recently attended.

The regulation is the good progress to protect smallholders and the people while encouraging fair partnership between the smallholders and palm oil companies. By deciding the fair price and having strong partnership, Riau hoped to create sustainable environment for the sustainability of palm oil industries and the people themselves. (T2)