Aceh Barat government finds palm oil mills buying farmer's crops below official price

The government of Aceh Barat district in Indonesia has uncovered a widespread practice among palm oil mills of purchasing fresh fruit bunches (TBS) from local farmers at prices significantly below the government-set rate. This discrepancy is causing substantial financial losses for farmers in the region.

According to Munadi, head of the Extension, Processing, and Marketing Division at the Aceh Barat Plantation and Animal Husbandry Office, the mills are buying TBS at prices between Rp2,800 and Rp2,900 per kilogram. This is considerably lower than the official government price, which for the third week of June 2026, was set at a minimum of Rp3,026.67 per kg for non-partner farmers and Rp3,062.08 per kg for partners, varying with crop age.

Data collected by market information officers shows that four palm oil mills operating in Aceh Barat, PT KTS, PT S, PT BBB, and PT M, are all offering prices below the standard. PT KTS buys at Rp2,950 per kg, PT S at Rp2,820, PT BBB at Rp2,810, and PT M at the lowest rate of Rp2,800 per kg.

In response to this issue, the Aceh Barat government has issued warning letters to the non-compliant mills, following similar directives from the Aceh Provincial Agriculture and Plantation Office. The local government emphasizes that all mills must adhere to the provincial meeting's decision on palm oil purchase prices to protect the rights of local farmers. To ensure compliance, the government intends to tighten supervision and collaborate with the Directorate of Special Criminal Investigation (Ditreskrimsus) of the Aceh Regional Police and the Aceh Barat Polres to address these violations.

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This firm action is taken to protect the rights of local farmers.