Consultant: New export policy must mitigate its impact on farmers

Jakarta (ANTARA) – Consultant and financial planner Elvi Diana advised the government to prepare mitigation for the impact of new export governance on farmers. In a written statement in Jakarta on Saturday, she explained that the single-window export policy through a state-owned enterprise (SOE) could alter the trade mechanisms that have long operated on competition among market players. The adjustment raises concerns among industry players and exporters about potential changes in distribution chains, transaction certainty, and price formation at the global level. “The market is basically very sensitive to regulatory changes, especially those relating to the trade of strategic commodities, such as palm oil. When the government announced the establishment of an export SOE as the sole exporter, market participants immediately perceived potential major changes in the trading mechanism,” Elvi said. According to Elvi, the reaction has already been visible in the price of fresh fruit bunches (FFB) for palm oil at the farm level, which has fallen by around Rp800 to Rp1,000 per kilogram. She agrees that the government’s policy aims to strengthen Indonesia’s position as the world’s largest palm oil producer through export governance. However, she warned that such strategic policies require a clear transition and careful communication to avoid upheaval in the domestic market. Therefore, she urged the government to promptly provide technical certainty regarding the policy’s implementation, including price formation mechanisms, export payment schemes, and protections for the prices of smallholders’ FFB. “Don’t let the market read this policy as centralisation that creates new uncertainty. The government must ensure the new trade governance actually increases efficiency and strengthens Indonesia’s bargaining position, not spark panic that harms farmers,” Elvi said. She also regarded price stability for palm oil FFB as crucial because it directly relates to the purchasing power of millions of palm farmers across regions. Therefore, she argued, every export policy change must consider the psychological and economic impacts on the domestic supply chain. “Commodity markets operate on trust. When market participants feel there is certainty and transparency, prices will stabilise. But if uncertainty arises, those first affected are usually the farmers in the field,” she added.