InfoSAWIT, JAKARTA – The Indonesian Ministry of Agriculture (Kementan) has officially revised the regulation on the trade of Fresh Fruit Bunches (FFB) for partner farmers through Ministerial Regulation No. 13 of 2024. This regulation, signed on November 20, 2024, replaces the previous Ministerial Regulation No. 01/Permentan/KB.120/1/2018.

According to the Ministry, the updated regulation aims to adjust the pricing mechanism for purchasing FFB from partner farmers, ensure fair pricing, prevent unhealthy competition, and support the sustainability of palm oil plantations.

The changes are expected to create a more transparent and equitable trade system for both plasma farmers and independent farmers, who play a crucial role in the supply chain of Indonesia's palm oil industry.

Key Provisions of the Regulation

In Chapter II of the regulation, the partnership agreement between farmers and palm oil mills (PKS) is elaborated. Article 2 mandates PKS to purchase FFB produced by partner farmers based on a mutually agreed partnership agreement.

Article 3 categorizes partner farmers into two groups Plasma Farmers, who collaborate with PKS on seed provision, technical assistance, training, harvesting, and FFB purchasing. And Independent Farmers, who cooperate with PKS primarily on FFB purchasing.

Farmers involved in such partnerships must have land ownership documentation, which may include certificates of ownership, land possession statements, or other documents as per agrarian and spatial planning regulations.

With this revision, the government aims to improve the welfare of partner farmers, strengthen ties between PKS and farmers, and promote sustainable palm oil trade practices. Ministerial Regulation No. 13/2024 is also intended to provide legal certainty and foster a more inclusive and competitive palm oil industry.

Moving forward, the successful implementation of this regulation will be key to building a more resilient and sustainable palm oil industry ecosystem in Indonesia. (T2)