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Palm Oil Should be The National Scale – Strategic Object



Doc. InfoSAWIT
Palm Oil Should be The National Scale – Strategic Object

InfoSAWIT, JAKARTA – Palm oil industries massively contributed to this country namely since the past decade by the downstream sector development into three groups, such as, food, renewable energy, and personal care – products.

Downstream industries have been smoothly running since 2012 that many big palm oil stakeholders pioneered and managed. Until now they have produced hundreds of decreasing products with kinds of advantages, both for food, energy, and personal care and cosmetic products.

Started in 2016, Indonesia has become the biggest and the kind of palm oil export in the world. It defeated Malaysia. In 2023, palm oil production reached 55 million tons and supplied to 54% palm oil markets in the world.

Until now palm oil has become the second biggest non – oil and gas export after coal that reached US$ 30,3 billion last year or 12% of the total exports. Indonesia has been the biggest palm oil consumer in the world within 27% of the global scale - consumption.

Behind the increasing production and consumption, a concern raised for the competition of palm oil use for food and bioenergy. Palm oil consumption in Indonesia reached 23,2 million tons or 46% of the total consumption nationally and 44% for food and 10% for oleochemical. 

This commodity did significantly contribute to poverty alleviation in many villages because 40% of about 16,5 million hectares palm oil plantations in Indonesia belonged to the smallholders that reached 6,7 million and palm oil industries directly and indirectly hired about 16 million men.

For the outstanding roles and contribution, palm oil should be treated as one strategic mainstay industry that is worth protected and managed well to deliver the social and economic advantages sustainably.

Unfortunately, the government until the era of Joko Widodo did not decide palm oil as the strategic industries. They were often taken as the step ones, as thorn for the green images or green committed, and in the critical times, as the victims for the temporary interests.

The issues about overlapping (plantation) permits, the accusation of deforestation to palm oil industries, as the government might fail to manage the spatial and conflicts.

In consideration about the strategic values, many issues, and potential problems that palm oil industries would face in the future, the stakeholders and other related parties hoped that the new government in the era of President Prabowo Subianto should implement some breakthroughs to improve the policy governance, institutions, and palm oil industrial controls.

The most significant priority is that the new government needs to decide palm oil as the national scale – mainstay strategic industries that would need protection, development, and control well.

The legal palm oil industries that delivered sources of living and life for millions of families, also delivered exchanges and source of revenue that qualified the criteria as the national scale – vital object as regulated in the Decision of President Number 63/2004 about The Security of National Scale Vital Objects. “They were about regions/locations, buildings/installation and/or business that have something to do with the life of many people, the country’s interests and/or the source of revenue which are strategic”.

To reach out the mission of the new President Prabowo in energy and food sovereignty, as the mainstay strategic sectors, palm oil industries should be categorized to be three functional characteristics of special strategy.

The first, palm oil as the strategic food barn industries to realize food security by deciding the plantation and industries for the needs and food products that are integrated as the strategic vital object to realize national scale – food security.

Palm oil industries for food security should be prioritized in the plantations that have been operated and integrated in food product industries, starting from palm cooking oil, margarine, and others.

The second, palm oil as the energy sufficiency to palm oil plantations and industries to be bioenergy starting from biodiesel, bio-aviation turbine, and others. For palm oil consumption gets increasing, it needs to develop new plantations in the locations where they are fixed to develop bioenergy, such as, in Papua, Kalimantan, and Sulawesi. There are million hectares of degraded areas and good to develop palm oil plantations and industries sustainably.

The third, palm oil that is integrated with additional values to be developed as the market needs and technology development.

Palm oil industries as the strategic vital object should base on the long term - frame work and road map, it would need better governance, research and development expansion to get superior seeds, policies about integrated upstream and downstream sectors, the harmony with the environmental, social, and governance sustainable standards.

As the strategic industries, it is time for palm oil to get integrated cultivation and management by one special institution to manage responsibly to formulate policies, get coordination, deal with data, and get integrated maps, permit, and control downstream industries.

The main works of the institution should be about accomplishing area conflicts because of overlapping permit, developing plantations and downstream sectors, conducting research and policy of palm oil use allocation for many goals, namely in bioenergy and food for the consumption and export activity. (*)

By: Edi Suhardi /Sustainability analyst and Chairman of Positive Campaign of Indonesian Palm Oil Association (IPOA)

 

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