Nadia Hadad: Palm Oil Productivity Governance Still Not at Maximum

Nadia Hadad: Palm Oil Productivity Governance Still Not at Maximum

InfoSAWIT, JAKARTA - Executive Director of the Sustainable Madani Foundation, Nadia Hadad said that data from the Corruption Eradication Commission (KPK) in 2017 found that the Palm Oil Plantation Fund Management Agency (BPDP-KS) collected funds for oil palm plantations from the proceeds of CPO (Crude Palm Oil) export levies amounting to Rp 11 trillion in 2016. Of these funds, as much as 81.8% was allocated for biodiesel subsidies, of which entrepreneurs received the largest portion of the subsidy.

“Funds for oil palm plantations should be used for programs directly related to the development and productivity of oil palm plantations. For example, rejuvenating smallholder oil palm plantations, developing facilities and infrastructure for oil palm plantations, human resource development programs in the oil palm plantation sector. Currently, this fund is mostly used for the biodiesel subsidy program and it doesn't really touch farmers, but the portion goes to entrepreneurs," he explained in a written statement received by InfoSAWIT, recently.

Furthermore, Nadia emphasized that this moratorium needs to be extended so that productivity issues can be maximized and the distribution of the results of the balance between the center and the regions can be more clear and resolved.

“The government needs to come up with a new formula to improve the welfare of oil palm farmers. Our study found that the use of oil palm plantation funds had not yet reached the maximum target, so it could not have a significant impact on the welfare of oil palm farmers. In addition, there needs to be an improvement in the formula for determining the price of Fresh Fruit Bunches (FFB) at the farmer level so that it is more equitable for the welfare of farmers and not only benefits entrepreneurs," said Nadia. (T2)