Palm Oil Association Urges Gov't to Revive Suharto-Era Transmigration Program

Palm oil sourced from illegally cleared rainforest areas in Indonesia has flowed through traders to major consumer goods brands despite widespread commitments to cease purchases of non-sustainable oil, a new report says. (Reuters Photo/Samsul Said)

By : Muhamad Al Azhari | on 6:41 PM January 14, 2018
Category : Business, Commodities

Jakarta. The Indonesian Palm Oil Association, or Gapki, urged the government to revive its now defunct transmigration program, first implemented under former President Suharto, to empower rural farmers and enrich palm oil producing regions.

Gapki secretary general Togar Sitanggang said in a statement on Friday (12/01) that the government's transmigration program made a significant contribution to the nation’s development as it helped open up isolated areas and successfully enriched workers in rural areas through improved resource exploitation.

In the 1980s and 1990s, many Balinese and Javanese workers moved to rural areas in remote locations in Kalimantan, Sumatra and Papua to cultivate land and extract natural resources under the transmigration program.

Togar, who spoke at a discussion session in Jakarta last week, said that many isolated regions have been able expand their administrative status to "regency" thanks to increased population growth and economic activity due to the program.

Many of these so-called transmigrants managed to find work as palm oil farmers, helping to stimulate local economies and create new settlements and towns.

The program continued into the 2000s, though the central government later turned its focus on local transmigration to better reallocate labor within regions.

Indonesia is the world’s largest palm oil producer. According to Gapki data, about 50 million Indonesians in their everyday lives depend on palm oil and its derivatives, be it directly or indirectly.

In 2016, the sector brought $18.6 billion in foreign exchange revenue.

The administration of President Joko "Jokowi" Widodo has signaled that it is paying serious attention to the sector, although there is no stated goal to revive the decades-long transmigration program. The current administration is focused on increasing plantation productivity and strengthening the role of smallholder farmers.

Coordinating Economic Affairs Minister Darmin Nasution said at a palm oil conference last year that boosting palm oil plantation productivity and improving farmers' welfare are integral parts of the government's agrarian reform initiative. This is aimed at narrowing wealth disparity through better land utilization and redistribution.

Jokowi initiated a replanting program by planting oil palm trees with high-quality seeds for more productive crops in plantation areas owned by smallholder farmers in Banyuasin, South Sumatra, in October.

Show More

 
MORE NEWS