Indonesia, as the world's largest palm oil producer, boasting an annual production exceeding 56 million tonnes and exports reaching 26.33 million tonnes, continues to reinforce its strategic position in the global agricultural landscape. In 2023 alone, palm oil and its derivatives contributed a staggering USD 28.45 billion, accounting for 11.6% of the country's total non-oil exports, while providing employment to approximately 16.2 million individuals, including numerous smallholders.
The Indonesian government has made considerable efforts to enhance the value chain of this critical industry, not merely focusing on raw materials but also on finished goods, thereby strengthening the country's economic base.
Airlangga Hartarto, the Coordinating Minister for Economic Affairs, elaborated on the government's initiatives during the National Coordination Meeting on the National Action Plan for Sustainable Palm Oil Plantations, held on 28 March 2024. He highlighted the significant strides in the biodiesel mandate, with the current implementation at B35 and trials for B40 underway. The domestic biodiesel uptake in 2023 was an impressive 12.2 million kilolitres, significantly boosting the internal use of Crude Palm Oil (CPO).
The roadmap outlined in Presidential Instruction No. 6 of 2019 (Inpres) encompasses a comprehensive plan to overhaul the governance of sustainable palm oil cultivation across the nation, spanning from data enhancement to dispute resolution. It mandates 14 ministries/agencies, 26 provincial governments, and 217 district governments in palm oil-producing regions to participate in implementing the five-component strategy, comprising 28 programmes and 92 activities leading to 118 outputs.
Noteworthy is the cumulative achievement in ISPO certification following the Inpres, with 883 companies and 52 cooperatives/groups of farmers certified, significantly promoting market access for sustainable palm oil products.
In addition to ISPO certification, the National Government has accelerated the Palm Oil Rejuvenation Programme (PSR), simplifying application processes and thereby boosting annual rejuvenation rates. By 2024, the programme had disbursed IDR 9.25 trillion, rejuvenating 331,007 hectares.
Furthermore, regional governments have been integral in advancing sustainable initiatives, with nine provinces already implementing their Sustainable Palm Oil Regional Action Plans.
The meeting also addressed various strategic decisions to facilitate smallholder involvement in sustainable practices, including revising financial allocations and reducing application requirements for the PSR programme.
In closing, Minister Hartarto stressed the government's commitment to resolving palm oil cultivation issues in forest areas, prepared with various scenarios backed by the Job Creation Law.
The event saw participation from high-level representatives from several governmental bodies, emphasizing a unified approach to enhancing the sustainability of Indonesia's palm oil industry.
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Published by: Ministry of Economic Coordination, Republic of Indonesia
Press Release HM.4.6/101/SET.M.EKON.3/03/2024
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