[MadaniNews, January 28, 2021] For the Indonesian palm oil industry to provide comprehensive prosperity to the people, a shared commitment to improving national palm oil governance is essential. This was conveyed by Trias Fetra, the Palm Oil Governance Program Officer of the Madani Berkelanjutan Foundation, in a Katadata Forum Virtual Series discussion themed " The Economic Impact of Palm Oil on Regions, " held on Wednesday, January 28, 2020.
Trias revealed that the massive expansion of palm oil has not been directly proportional to the improvement in people's welfare, because in reality only a handful of people have felt the significant benefits of this palm oil expansion.
" One of the causes of this disparity is that the pricing of Fresh Fruit Bunches (FFB) based on the K Index only considers production costs from palm oil mills, not farmers' production costs. As a result, farmers are severely disadvantaged by lower FFB prices. The company's operational costs are borne by the farmers, and their bargaining power is severely compromised ," said Trias.
The discussion, which also highlighted the achievements of Presidential Instruction Number 8/2018 concerning the Postponement and Evaluation of Permits and Increasing Productivity of Palm Oil Plantations (Palm Oil Moratorium Presidential Instruction), was attended by the Head of the West Kalimantan Provincial Plantation Service, Heronimus Hero, and also the Head of the Center for State Budget Policy, Ministry of Finance, Ubaidi Socheh Hamidi.
Regarding the presidential instruction on the palm oil moratorium, Heronimus Hero said that even though the palm oil moratorium has ended, the regional government, especially the Province of West Kalimantan, will also not issue any more permits due to the unavailability of land.
Meanwhile, Ubaidi Socheh Hamidi elaborated extensively on the fiscal situation of the palm oil plantation sector in the region. Ubaidi stated that he could not ignore the continued dominance of balancing funds from the central government. This is due to the small regional revenue (PAD). In West Kalimantan, PAD only contributes 16% to regional revenue.
Get materials in the discussion on the Economic Impact of Palm Oil for Regions by downloading the materials available below.
Presentation of the Sustainable Madani Foundation Economic Impact of Palm Oil
West Kalimantan Plantation Service Economic Impact of Palm Oil for Regions
Fiscal Policy Agency Economic Impact of Palm Oil for Regions
