InfoSAWIT, JAKARTA - The development of Indonesia’s palm oil sector continues to significantly impact the economy in remote areas, according to Ignatius Ery Kurniawan, Chief Editor of InfoSAWIT. He highlighted that the presence of palm oil plantations has empowered rural regions to become more advanced, with the potential to grow into towns or even provinces in the future, although this transformation could take decades.
"The palm oil sector is not just about opening up plantations; it has also positively impacted the local economy," Ery stated during the 16th Sustainable Palm Oil Focus Group Discussion, entitled "Sustainable Oil Palm Plantations Grow the Economy of Rural Communities". The event, organized by InfoSAWIT and supported by the Palm Oil Plantation Fund Management Agency (BPDP-KS), took place on November 1, 2024, in Jakarta.
Ery pointed out that out of Indonesia’s 38 provinces, a majority benefit from the economic contributions of the palm oil sector, highlighting its strategic role in regional development. He emphasized the importance of local government support in assisting palm oil farmers, particularly in forming cooperatives, which are essential for improving farmers' welfare. "Cooperatives can serve as a platform for farmers to strengthen their bargaining power and gain better market access," he added.
Ery also underscored the need for adequate funding to support smallholder palm oil plantation rejuvenation. Financial support, particularly through subsidies from BPDP-KS, is crucial to boost plantation productivity and promote sustainable farming practices. He noted that smallholder practices currently fall short of sustainability standards, necessitating technical guidance and financial aid to optimize yields.
Infrastructure improvements, such as roads and bridges, are equally important, Ery stated, as they facilitate farming activities and enhance farmers' access in remote areas. "Good infrastructure will help farmers transport their harvest and reach wider markets," he explained.
Ery also highlighted the importance of fair partnerships between farmers and palm oil companies. He stressed that transparent, mutually beneficial partnerships are vital to overcoming challenges in the field and ensuring sustainable palm oil production. "A strong partnership will benefit both parties and empower farmers," he asserted.
Moreover, Ery emphasized the need for sustainability certifications, such as Indonesian Sustainable Palm Oil (ISPO) and the Roundtable on Sustainable Palm Oil (RSPO), as essential requirements for accessing export markets. These certifications not only encourage eco-friendly farming practices but also open international market access for Indonesian palm oil products. "To compete globally, our palm oil products must meet sustainability standards through certifications like ISPO and RSPO," Ery explained, expressing hope that such certifications could boost farmers' income by expanding export opportunities.
In recent years, some palm oil farmers have adopted intercropping practices, planting crops like corn and chili around their palm plantations. Ery mentioned that this approach could help local communities meet their daily food needs while also increasing their income.
Ery concluded with a call for continued support and collaboration from the government, companies, and other institutions to improve palm oil farmers’ livelihoods. "With strong collaboration, we can create a better, sustainable palm oil industry," he affirmed. (T2)
