To be nimble and not overlapping in managing the palm oil industry

A special body is needed to develop and regulate the palm oil industry from upstream to downstream.

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Agar Cekatan dan Tak Tumpang Tindih Mengelola Industri Sawit

KOMPAS/HERU SRI KUMORO

Workers carry palm fruit at the Jonggol palm plantation, Bogor Regency, West Java, on Saturday (1/13/2024). The palm oil commodity is one of the contributors to the national economic growth, both through international trade and job creation. The Central Statistics Agency (BPS) noted that in 2022, Indonesia's crude palm oil exports to more than 160 countries reached a value of 29.62 billion US dollars or equivalent to 462.04 trillion Indonesian rupiah.

The palm oil industry has a major contribution to the national economy. However, this industry has not been able to optimize its potential because its management and regulations involve no less than 30 ministries or state institutions.

As a result, policy-making is often slow and existing regulations frequently overlap between different institutions. Stakeholders of this industry propose the formation of a specialized body that focuses on developing and regulating the palm oil industry.

Acting General Chair of the Indonesian Palm Oil Council (DMSI) Sahat Sinaga said that Indonesia has the potential to continue developing the palm oil industry. With fertile land and massive and extensive gardens, there is still a lot of potential that can continue to be developed.

However, the potential for development is often hindered by institutional issues in Indonesia, resulting in suboptimal outcomes. There are as many as 30 ministries and state agencies responsible for overseeing and regulating the industry, such as the Ministry of Industry, the Ministry of Agriculture, the Ministry of Trade, and the Ministry of Environment and Forestry. Each agency has different duties and functions, resulting in numerous regulations that palm oil industry stakeholders must adhere to.

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For example, the development of the palm oil industry is under the supervision of the Ministry of Industry. However, plant rejuvenation and management are under the Ministry of Agriculture. Meanwhile, export issues and international trade barriers are under the Ministry of Trade.

"There are many ministries and institutions that are involved in regulating the palm oil industry. This leads to slower decision making and even overlaps among them," said Sahat during a journalist workshop on downstream palm oil industry in Bandung on Thursday (1/2/2024)."

KOMPAS/KURNIA YUNITA RAHAYU

menyatakan, pihaknya sebagai organisasi yang mewakili industri kelapa sawit tidak akan terpengaruh dengan kasus hukum yang menjerat PT Sinar Mas Agro Resources and Technology Tbk (SMART). Menurut Sahat, kasus ini merupakan kasus antara pihak yang bersengketa dan tidak ada kaitannya dengan industri kelapa sawit secara keseluruhan. Ia juga menambahkan bahwa industri kelapa sawit di Indonesia masih banyak memberikan manfaat bagi masyarakat, termasuk penciptaan lapangan kerja dan kontribusi terhadap ekonomi negara.

He proposed that a special body should be formed to develop and regulate the palm oil industry, from upstream to downstream. According to him, Indonesia can learn from Malaysia which has the Malaysian Palm Oil Board (MPOB) that effectively manages policies related to palm oil so that they are no longer chaotic.

On the same occasion, Chair of the Media Relations Compartment of the Indonesian Palm Palm Oil Association (Gapki) Entrepreneurs Association (Gapki) Fenny Sofyan said, the challenges of developing the palm oil industry faced with legal certainty and frequently changing policies. One of them is because there are many ministries and institutions that have provisions and regulations for the palm oil industry.

There are numerous ministries and institutions that have regulations and rules for the palm oil industry.

"We, as stakeholders of the palm oil industry, hope for ease of doing business so that we can create certainty in our business and efficiency in our operations," said Fenny.

The palm oil commodity is one of the contributors that supports national economic growth, both through international trade and employment. The Central Statistics Agency (BPS) noted that Indonesia's exports of crude palm oil (CPO) to more than 160 countries in 2022 will reach a value of 29.62 billion US dollars or the equivalent of IDR 462.04 trillion. .

In addition, there are 16.2 million people involved in the oil palm plantation sector, either as workers or smallhold farmers. Of the total 16.38 million hectares of oil palm plantations in Indonesia, 41 percent are owned by smallhold farmers.

Presidential candidate's commitment

Previously, in a discussion entitled "Deliberation with National Palm Oil Stakeholders" held by the daily Kompas, in Jakarta, Wednesday (17/1/2024), the team of presidential candidate pairs expressed their views regarding the development of the palm oil industry in the future .

The National Winning Team (Timnas) of Anies-Muhaimin (Amin) Achmad Nur Hidayat stated that the Amin pair has serious attention to make palm oil as a new economic growth source.

According to him, since 1998, palm oil growth has experienced a tremendous surge. "We want to tell the Indonesian people and the world that palm oil is the easiest corporate advantage, the one that already exists in Indonesia and this must be our strategic defense," said Achmad.

KOMPAS/HERU SRI KUMORO

Achmad Nur Hidayat from the National Winning Team for Presidential and Vice Presidential Candidates 1 was a resource person in the Kompas Talk with the title "Deliberation with Indonesian Palm Oil Stakeholders" in Jakarta, Wednesday (17/1/2024). This Kompas discussion is an opportunity to exchange thoughts and ideas between the winning team for presidential and vice presidential candidates and the Indonesian palm oil community.

According to him, palm oil commodities have been proven to help the national economy and are expected to have an increasingly significant role, requiring sustainable efforts in downstream or industrialization of palm oil products and derivatives. However, this development is not without policy issues from the inconsistent government policies, such as the ban on palm oil exports.

Therefore, the presidential candidate (capres) and vice presidential candidate (cawapres) Amin offer a vision, a mission, and a program that specifically highlights palm oil farmers. One of the main issues faced by palm oil farmers in recent years is the regulation of forest areas (vertical) or the clarity of land for small-scale farmers.

Representative from Prabowo-Gibran's National Campaign Team (TKN), Panji Irawan, stated that one of the foundations of Indonesia Maju, as promoted by the presidential and vice-presidential candidates Prabowo-Gibran, is to make Indonesia the number one palm oil producer in the world. This effort will support the vision of Indonesia Emas 2045, which aims to free Indonesia from the middle-income trap by optimizing the demographic bonus and available natural resources.

KOMPAS/HERU SRI KUMORO

Panji Irawan (center) from the National Winning Team for Presidential and Vice Presidential Candidates 2 was a resource person in the Kompas Talk with the title "Deliberation with Indonesian Palm Oil Stakeholders" in Jakarta, Wednesday (17/1/2024). This Kompas discussion is an opportunity to exchange thoughts and ideas between the winning team for the presidential and vice presidential candidates and the Indonesian palm oil community.

According to Panji, palm oil commodities will continue to progress because they are the backbone of the Prabowo-Gibran candidate pair program. In Prabowo-Gibran's 17 priority programs, for example, Indonesia has the opportunity to become the world's king of green energy through biofuel derivative products from palm oil.

"Prabowo and Gibran Agree to Improve the Welfare of Oil Palm Farmers through Five Pillars. Firstly, with regards to land ownership certainty, Mr. Prabowo and Mr. Gibran will support the recognition of the legality of oil palm plantations related to forest areas and the certification of farmer plantations using palm funds," he said.

Next, we will provide support to farmers to enter downstream sectors through cooperatives and support for the establishment of an Indonesian palm oil body. In addition, palm oil farmers' representation in the Oil Palm Plantation Fund Management Agency (BPDPKS) will be ensured, and regulations for palm oil farmers will be guaranteed in every planning.

Representative from the Ganjar-Mahfud National Winning Team (TPN), Danang Girindrawardana, believes that palm oil commodities will be one of the main supports for the Ganjar-Mahfud couple's vision to achieve 7 percent economic growth and create 17 million jobs. However, there are three problems currently being faced by palm oil, namely from the upstream, intermediate and downstream sides.

KOMPAS/HERU SRI KUMORO

Danang Girindrawardana from the National Winning Team for Presidential and Vice Presidential Candidates 03 was a resource person at the Kompas Talk entitled "Deliberation with Indonesian Palm Oil Stakeholders" in Jakarta, Wednesday (17/1/2024). This Kompas talk is a forum for exchanging thoughts and ideas between the winning team for the presidential and vice presidential candidates and the Indonesian palm oil community.

Of the three issues, says Danang, the main problem lies upstream, specifically related to the certainty of land use rights (HGU) which easily changes depending on the egosectoral interests of stakeholders or decreasing productivity. According to him, the upstream problem needs to be immediately resolved so that Indonesia can remain the world's main producer of palm oil.

"It's time for Ganjar-Mahfud to talk about solutions, the solution is 3S, Palm Oil-Strategy Solution. Formulate it there, make a roadmap there, invite friends from the stakeholders," he said.

The three solutions are ensuring and strengthening BPDPKS or even replacing it with a ministerial level institution. Then, ensure a more intimate partnership between large companies, farmers, small holders and the government. Apart from that, increasing legal certainty, land use rights, and changing the bureaucratic culture in making regulations.

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