Indonesian government decided to revise the target area of replanting ​​oil palm plantations from 200,000 to 180,000 hectares (ha) per year - Photo: Privacy.

JAKARTA (TheInsiderStories) – Indonesian government decided to revise the ​​palm oil replanting plans from 200,000 hectares (ha) to 180,000 ha per year, official said on Wednesday (09/18). The revision has been taken due to the administrative process.

With the revised target, the 2.49 million ha palm oil replanting program period will also be extended to more than 10 years from originally to be completed during 2017-2021.

The director general at the ministry of agriculture Kasdi Subagyono stated to meet the targets, the government has shortened procedure for the smallholders to replanting the palm oil, as President Joko Widodo ordered. With the revision, he adds, the government hope will help the farmers’ productivity rise.

Form initially 27 procedures now has been cut down to at least eight procedures, the official said. Subagyono explained, under the new scheme, the government will disburse Rp25 million (US$1,785) grant per hectare and the remaining fund will be financed under the microcredit scheme called People’ Business Credit.

Besides reducing the replanting target, there will also be an involvement of independent surveyors to accelerate the process of fulfilling administrative requirements by the government. A joint surveyor from the ministry of agriculture will play a role in helping farmers complete the requirements that need to be met.

Subagyono noted the realization of the replanting program in 2017 only reached 4,000 ha followed by 33,000 ha in 2018. Meanwhile, from June to August this year, the number of technical recommendations that have been submitted to the Plantation Fund Management Agency has reached 51,000 ha.

He was also optimistic that his party could issue technical recommendations for an area of ​​15,000 – 17,000 ha per month in the period September to December this year. By the end of the year, the area of ​​land that has received the recommendations is expected to reach 119,000 to 180,000 ha.

As the world’ largest producer and consumer of palm oil, Indonesia relies on this commodity in major economic and social ways. In recent years, crude palm oil (CPO) exports have become the country’s largest source of foreign trade, reaching $17.89 billion, down from $23 billion in 2017 – the highest value ever – contributing 15.9 percent of the country’s total national export value, statistics agency data showed.

Early of this week, Indonesian Palm Oil Association (GAPKI) noted the country’ palm oil exports hit 2.92 million tons (MT) of CPO in July, 15.87 percent higher than the previous month. Cumulatively, the export volume during January – July reached 19.76 MT of CPO, an increase of 6.7 percent over the same period last year.

According to the agency, every 25 years, palm oil plants cease being productive and need to be replanted. In Indonesia, there is currently an area of 2.4 million ha of smallholder oil palm plantations that have reached replanting age. However, at the end of 2017, only about 2,942 ha were replanted in South and North Sumatra – the replanting target for 2018, for comparison, is 185,000 ha.

This results in a much lower production of CPO than the country should be capable of producing. Forty-one percent of oil palm plantation land is managed by smallholders, who produce on average 2–3 tons of CPO per ha per year – a rate that is approximately half that of large private estates.

US$1=Rp14,000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com