People's Palm Oil Generates Foreign Exchange 7 Billion Dollars a Year - The foreign exchange generated by people's palm oil for the national economy is approximately equal to the value of foreign debt installments that the government must pay every year.
Every year the Indonesian palm oil industry generates foreign exchange (net exports) of around USD 20 billion from exports of palm oil and its derivative products. For now, only the palm oil industry is able to contribute that much foreign exchange to the Indonesian economy. Other export sectors are far below that, even most of them on a net basis (exports-imports) experience a deficit or undermine foreign exchange.
The foreign exchange generated by the palm oil industry comes from exports of palm oil and its derivatives, an average of 20 million tons. Of the export volume, about 35 percent comes from palm oil produced by 2.7 million smallholders from smallholder oil palm plantations of 4.5 million hectares in 190 districts in Indonesia.
Through business partnerships between oil palm farmers and state-owned enterprises and private companies, smallholders' FFB production is processed into crude palm oil (CPO). A small portion is exported in the form of CPO, and the largest portion is processed domestically for domestic and export needs.
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Apart from contributing to foreign exchange, the contribution of people's palm oil is also quite important to drive the rural economy. People's oil palm plantations that developed in 190 regencies, which are generally located in remote areas, suburban areas, and even underdeveloped areas, have become the driving force of the small people's economy.
Apart from providing job opportunities for their brothers and sisters in the countryside, smallholder palm oil also drives micro-enterprises such as food stalls, basic food shops, small shops, and even grocery stalls in rural areas. Indirectly, smallholder palm oil also contributes to central and local government revenues through taxes levied on the entire chain of palm oil originating from smallholder's palms.
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What is even more encouraging is that the development of smallholder palm oil is not subsidized by the government so that it does not burden the government budget. With their own independence and creativity, oil palm farmers are gradually developing their palms, without begging for help from the government. This is different from farmers in developed countries such as European and USA farmers who receive massive subsidies from the government so that the country's agriculture is actually not sustainable.
Even without a sustainability certificate, smallholder oil palm plantations are actually relatively sustainable in terms of economic, social, and environmental aspects. If we see that people's oil palm plantations are not sustainable, then what needs to be changed is our paradigm of interpreting and measuring what sustainability is. If the legality of smallholder oil palm plantations is being questioned by the government, the answer is that the regents should be proactive in giving them to oil palm farmers. The legality of farming including smallholder oil palm plantations is the time to serve as a public service that must be provided by the government.
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Another important government service is policies that support the palm oil industry and protect it from oppression. Given that 42 percent of Indonesian palm oil is smallholder palm oil, policies that support the national palm oil industry are essentially policies that support smallholder palm oil. On the other hand, policies that are detrimental to the national palm oil industry are tantamount to sacrificing people's palm oil. An anti-palm NGO is the same as an anti-palm oil NGO. The anti-palm oil campaign in various countries is the same as the anti-palm oil campaign.