The Indonesian Palm Oil Farmers\u2019 Association (Apkasindo) has warned\nof serious impacts if the proposal to close palm oil mills (PKS) without\nplantations is truly realised. This policy is seen as potentially\ndevastating millions of independent palm oil farmers across various\nregions.<\/p>\n
Independent palm oil farmers are small-scale growers who manage their\nland independently, without partnerships with large companies. Apkasindo\nnotes that of the total 6.87 million hectares of smallholder\nplantations, around 93.2% are managed by independent farmers.<\/p>\n
The General Chairman of the Apkasindo Central Executive Board, Gulat\nME Manurung, emphasised the significant risks that could arise if\ncommercial palm oil mills are closed.<\/p>\n
\u201cIndependent or self-reliant farmers\u2014imagine the chaos that would\noccur if commercial palm oil mills were really closed,\u201d said Gulat in\nhis statement, quoted on Wednesday (29\/4\/2026).<\/p>\n
He explained that in the palm oil industry, there are two main groups\nof farmers: partnered farmers, both plasma and independent, and fully\nindependent farmers with no ties to companies.<\/p>\n
According to him, the existence of palm oil mills without plantations\nhas actually helped maintain the balance of the fresh fruit bunch (TBS)\nmarket. Mills of this type make TBS prices at the farmer level more\ncompetitive while ensuring supply stability.<\/p>\n
Additionally, commercial palm oil mills also help alleviate queues\nfor TBS sales. Conventional mills tend to prioritise fruit from their\ncore plantations and plasma partners, so independent farmers often have\nto wait longer.<\/p>\n
Furthermore, the presence of commercial palm oil mills is seen as\nencouraging healthier competition in the palm oil trade and preventing\nmarket dominance by a few parties.<\/p>\n
\u201cThere is no monopoly by one or two mills. What is needed now is\nefforts to ensure all conventional palm oil mills comply with government\nregulations, especially the provincial determination of TBS prices,\u201d he\nsaid.<\/p>\n
Gulat even suspects that the issue of closing palm oil mills without\nplantations is deliberately raised by certain parties who want to\ncontrol the palm oil trade chain.<\/p>\n
On the other hand, he stressed that commercial palm oil mills also\ncontribute to the regional economy through investments, job absorption,\nand increased money circulation in society.<\/p>\n
As a solution, Apkasindo proposes that the government require all\npalm oil mills to form partnerships with farmers, with a minimum portion\nof 20% of raw materials coming from farmers\u2019 TBS.<\/p>\n
With this scheme, TBS supply is expected to be more assured while\nensuring prices follow the determinations of the Plantation Offices in\neach region.<\/p>\n
\u201cThe partnership scheme proposed by Apkasindo benefits all parties,\nboth conventional palm oil mills, commercial palm oil mills, independent\npalm oil farmers, and plasma, namely the certainty of TBS supply,\u201d said\nGulat.<\/p>\n
As a note, the proposal to close palm oil mills without plantations\nis currently being discussed up to the central government. On the other\nhand, there are views that the existence of such mills triggers intense\ncompetition in vying for TBS supply in the field.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/what-would-happen-if-indonesia-really-closed-commercial-palm-oil-mills-1777438363", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }