Co-operatives aim to own cooking-oil refineries by 2027
The Ministry of Co-operatives is encouraging co-operatives to move beyond managing upstream plantations and independently build crude palm oil (CPO) factories and their own cooking-oil refineries.
Jakarta (ANTARA) – Indonesia’s Ministry of Co-operatives is targeting the national co-operative movement to own a cooking-oil refinery by 2027, as part of efforts to strengthen downstream palm-oil processing and increase value added for farmers.
Speaking at the National Meeting of Indonesian Palm Oil Farmers, organised by the Indonesian Palm Oil Farmers Association (Apkasindo) in Jakarta on Wednesday, Co-operatives Minister Ferry Juliantono said palm-oil farmer co-operatives needed to expand their businesses from plantation management to processing harvests into higher-value products, including cooking oil.
“Through a strategy to strengthen the people’s economy, the Ministry of Co-operatives is encouraging co-operatives to move beyond managing upstream plantations and independently build crude palm oil (CPO) factories and their own cooking-oil refineries,” Ferry said in a ministry press release.
Ferry said co-operative-based downstream development was needed to ensure farmers gained greater economic benefits from the palm-oil industry chain, which has so far been dominated by large corporations.
He cited a co-operative in Musi Banyuasin, South Sumatra, which operates a CPO factory with a capacity of 60 tonnes per hour, as a model for co-operative-based palm-oil industry development.
Ferry said the cooking oil produced by co-operatives would be marketed through the Merah Putih Village/Sub-district Co-operative (KDKMP) network.
“The market is already there and the outlets are already in place. We can envisage tens of thousands of Merah Putih Village/Sub-district Co-operative outlets selling cooking oil produced by the co-operatives themselves,” he said.
The Ministry of Co-operatives is also urging Apkasindo to form a partnership with PT Agrinas Palma Nusantara through a smallholder-plasma partnership scheme.
The partnership is intended to involve co-operatives in managing land reclaimed through enforcement action by the Forest Area Enforcement Task Force (PKH), so that farmers can benefit from the resulting economic value added.
At the same event, National Development Planning Minister and National Development Planning Agency (Bappenas) head Rachmat Pambudy stressed the importance of farmer solidarity and stronger downstream processing to improve the welfare of smallholder palm-oil farmers.
Rachmat urged plasma farmers to maintain solidarity, including in stabilising fresh fruit bunch (FFB) prices at farm level, and not to be tempted to sell cheaply to outside parties.
Meanwhile, Apkasindo’s DPP Supervisory Board chairman, retired Indonesian Armed Forces general Moeldoko, reaffirmed the association’s commitment to its two strategic roles: working with the government to oversee regulations that support farmers, and serving as a bridge between the interests of farmers, businesses and the state.