Five speakers during the panel discussion titled '

Palm Oil Continues to Makes Significant Contribution to Indonesian Economy: Gapki


JANUARY 14, 2019

Jakarta. The palm oil industry is one of Indonesia's biggest earners of foreign exchange revenue, having contributed 2.46 percent to the country's gross domestic product in 2017.

The country is the world 's largest producer of the commodity with total output of 42 million metric tons last year, according to the Indonesian Palm Oil Entrepreneurs Association (Gapki).

Gapki chairman Joko Supriyono said the industry continues to make significant progress, especially on the development of sustainable palm oil products.

"Palm oil production must be developed continuously as it could greatly benefit society and the environment, while also contributing to state revenue," Joko said during a palm oil seminar in Jakarta on Wednesday last week.

The government has certified more than 3 million hectares of palm oil plantations and issued 467 certificates to a myriad of business players under the Indonesian Sustainable Palm Oil (ISPO) scheme last year.

Only the Ministry of Agriculture is authorized to issue ISPO certification on behalf of the national government. ISPO certification is aimed at fostering greater acceptance of the country's palm oil products overseas, while also reducing greenhouse gas emissions.

Indonesia produced 6.5 million tons of certified sustainable palm oil from a total global production of 12.43 million tons, under the Roundtable on Sustainable Palm Oil (RSPO) scheme, a global multi-stakeholder initiative widely recognized by both buyers and producers.

Gapki said the country's successful progress in developing the palm oil industry, especially the downstream sector, is the result of sound government policies.

In 2015, the government imposed an export levy, collected by the Indonesian Palm Oil Estate Fund (BPDP-KS), to subsidize downstream players in a bid to accelerate the sector.

This has seen a gradual increase in exports of downstream palm oil products, with the raw commodity having only made up 24 percent of the total in 2017, from 56 percent in 2008.

"The revenue generated through palm oil production – from upstream to downstream – has boosted the welfare of Indonesians," BPDP-KS chairman Dono Bustami said.

Abetnego Tarigan, senior advisor in the Presidential Office, said palm oil production in various regions is also supported by many community and related parties involved in developing oil palm businesses.

The Agency for the Assessment and Application of Technology (BPPT) has conducted research in collaboration with various parties, including universities and companies, on behalf of the government to advance Indonesia's downstream palm oil products.

According to BPPT researcher Agus Kismanto, palm oil has significant potential as a bioenergy source and should therefore be encouraged as a replacement for fossil fuels.