'Oil palm plant ban will not last long'<\/p>\n
JAKARTA (JP): The government's recent ban on new foreign
\ninvestments in oil palm plantations will not last long, because a
\npermanent restriction will contradict the free trade principles,
\nan observer has said.<\/p>\n
Chrisman Silitonga, an observer of agricultural and food
\nissues, said on the weekend he was certain the government would
\nreconsider the decision once the move was countered with free
\ntrade arguments.<\/p>\n
Chrisman, who also works with the National Logistics Agency,
\nbelieved the decision to ban foreign investment in oil palm
\nplantations was aimed at diversifying the types of agricultural
\ncommodities grown in Indonesia.<\/p>\n
\"I think the government doesn't want to see only one commodity
\ndevelop rapidly while the others are left behind,\" he said. \"I
\nthink the government is aiming at creating a balance between the
\ntypes of commodities grown,\" he said.<\/p>\n
Chrisman said many Indonesian and foreign businesses were now
\ncompeting to invest in that sector.<\/p>\n
\"If these large investments continue -- leading to an
\noversupply of oil palm production -- they would effect prices and
\nbecome a boomerang to the investors,\" he said.<\/p>\n
Chrisman said if the government wanted to see a better
\ndiversification of agricultural commodities, the ban should not
\nbe imposed on foreign investments alone but on domestic
\ninvestments as well.<\/p>\n
\"And the ban should not only be aimed at investments in oil
\npalm but in all agricultural commodities that have a tendency to
\n'backfire' like oil palm,\" he added.<\/p>\n
He said the government should not include the ban on
\ninvestments in oil palm estates on the negative investment list.<\/p>\n
\"The list is meant to protect small and medium enterprises.
\nThose in the oil palm sector are big businesses, none of whom
\nneed special protection that requires the sector to be put on the
\nlist,\" Chrisman said.<\/p>\n
Earlier this month the government temporarily froze Malaysian
\ninvestments in oil palm plantations in North Sumatra saying
\nMalaysia had overinvested in the sector.<\/p>\n
So far 27 Malaysian companies have entered Indonesian oil palm
\nestates in cooperation with local companies.<\/p>\n
Minister of Agriculture Sjarifudin Baharsjah said last week
\nthe government's decision to freeze oil palm plantation and
\nrelated palm oil industry for foreign investors was because there
\nwas an oversupply of palm oil on the world market.<\/p>\n
State Minister of Investment Sanyoto Sastrowardoyo said last
\nweek that the government might totally close oil palm plantations
\nto foreign investors. He said this was needed to protect local
\npalm oil plantation companies.<\/p>\n
A reliable source said the government's decision to ban the
\ninvestments was because the giant Sinar Mas and Salim groups --
\ncontrolled by politically well-connected business tycoons Eka
\nTjipta Widjaja and Liem Sioe Liong -- did not want to see anyone
\nreducing their domination.<\/p>\n
The source said it was also because Malaysian investors were
\nreluctant to set up joint ventures with the two groups and
\npreferred instead to link up with smaller, medium-scale
\nbusinesses, mostly controlled by indigenous Indonesians.<\/p>\n
Another reliable source said several crude palm oil (CPO)
\nexporters were now suspected of misusing rediscount facilities by
\nmarking up export volumes.<\/p>\n
\"The case had been submitted to the General Attorney's office
\nbut was turned down because of objections from Bank Indonesia,\"
\nthe source said.<\/p>\n
Indonesia is the world's second largest CPO producer,
\nproducing half the volume of Malaysia. (pwn\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/oil-palm-plant-ban-will-not-last-long-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}