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🇮🇩 Indonesia /Economy & Trade

Indonesia's Palm Oil Farmers Urge Accelerated Replanting for B50 Biodiesel Supply

From Republika · (10m ago) Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

TLDR

  • Indonesia's Palm Oil Farmers Union (SPKS) urges accelerated replanting programs to ensure raw material supply for the B50 biodiesel policy.
  • The union notes that the People's Oil Palm Replanting (PSR) program's realization is far below target, impacting farmer productivity and national biodiesel needs.
  • SPKS proposes increased PSR funding and an evaluation of biodiesel subsidies to prevent negative impacts on farmer welfare and TBS prices.

The Indonesian Palm Oil Farmers Union (SPKS) emphasizes the critical need to bolster the upstream sector to guarantee the sustainability of the palm oil industry, especially with the government's push for B50 biodiesel.

The PSR program plays a strategic role in increasing the productivity of smallholder oil palm farmers while supporting the national energy raw material needs.

— SabarudinChairman of the Indonesian Palm Oil Farmers Union (SPKS) explaining the importance of the replanting program.

Sabarudin, the chairman of SPKS, highlighted that the People's Oil Palm Replanting (PSR) program is crucial for boosting farmer productivity and meeting national energy demands. However, he pointed out that the program's implementation has lagged significantly behind its targets since 2015. This underachievement directly affects the supply of crude palm oil (CPO) essential for the B50 biodiesel initiative, scheduled for full implementation in July 2026.

So far, the realization of PSR is still far from the target. Yet, this program is very important to increase farmer productivity and support future biodiesel raw material needs.

— SabarudinChairman of SPKS highlighting the program's underachievement.

SPKS estimates that replanting could increase fresh fruit bunch (TBS) productivity from around 10 tons to over 20 tons per hectare annually, provided good cultivation practices are adopted. This increase is vital for the B50 program's success. Yet, challenges such as land legality and financing during the replanting period, where farmers lose income, remain significant hurdles.

During the replanting period, farmers lose income. Therefore, the financing scheme must cover living costs, not just planting costs.

— SabarudinChairman of SPKS addressing the financial challenges faced by farmers during replanting.

To address these issues, SPKS advocates for an increase in PSR financial assistance from Rp60 million to Rp90 million per hectare to cover both technical needs and farmers' living expenses. Furthermore, the union calls for a review of the biodiesel subsidy scheme to ensure it does not depress the TBS price at the farmer level, particularly concerning export levy contributions. SPKS believes that strengthening the upstream sector, managed significantly by smallholder farmers who control about 40% of national oil palm plantations, is the linchpin for the successful downstreaming of palm oil, including the B50 program.

Don't let the downstreaming policy burden farmers through lower TBS prices due to the export levy scheme.

— SabarudinChairman of SPKS warning against the negative impacts of the biodiesel policy on farmers.
DistantNews Editorial

Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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