InfoSAWIT, JAKARTA – Indonesia’s Palm Oil Farmers Union (SPKS) has commended President Prabowo Subianto’s decision to cancel non-performing debts for micro, small, and medium enterprises (MSMEs) within the agricultural, plantation, livestock, fishery, and marine sectors. This initiative was formalized under Government Regulation (PP) No. 47 of 2024, signed by President Prabowo at the State Palace on November 5, 2024.
The Chairman of SPKS, who attended the signing event, expressed gratitude for the new policy, highlighting that it reflects President Prabowo’s strong support for small-scale farmers, especially palm oil farmers burdened by debt. "This is remarkable; we are grateful. It truly demonstrates the government’s commitment to small farmers, particularly palm oil farmers in Indonesia," said SPKS Chairman Sabarudin in a statement to InfoSAWIT on Thursday (7/11/2024).
Most debts accumulated by palm oil farmers originate from partnership programs involving plantation companies, such as the Plasma Partnership Model (PSM) and the Primary Cooperative Credit for Members (KKPA) schemes. Under these frameworks, many farmers have faced challenges, particularly due to a lack of transparency from companies managing the plantations and the low productivity of palm oil plantations.
The SPKS chairman explained that these debt burdens have made it difficult for palm oil farmers to participate in the People’s Palm Oil Replanting Program (PSR), which aims to enhance plantation productivity. Debt has also limited farmers’ access to bank loans, often forcing them to rely on high-interest loans from informal lenders, ultimately hindering their business growth.
With the debt cancellation policy, farmers are expected to have a renewed opportunity to access formal banking loans. SPKS hopes the government will soon issue clear implementation guidelines to ensure the smooth process of debt cancellation at the farmer level. "We hope that conditions and mechanisms for farmers will be issued promptly to avoid confusion, especially for palm oil farmers," Sabarudin added.
This debt relief initiative is expected to improve the economic well-being of palm oil farmers and other MSMEs, bolster the agricultural sector, and further drive productivity within the plantation sector. (T2)
