correction, Indonesia this year produce 15.4 million tonne of CPO. Indonesia government still trying our the biodiesel but you were right about the subsidy.
Palm oil producers urged the government Tuesday to help the industry expand by providing more land, as well as help prevent environmental disputes with non-governmental organizations.
During a meeting with Vice President Jusuf Kalla, the Indonesian Palm Oil Producers Association (GAPKI) requested that the government provide up to three million hectares of land in Sumatra and Kalimantan over the next five years.
"We don't want land near conservation areas, national parks or water catchment areas as this could damage the environment. What we want is land that is basically trouble-free," said GAPKI chairman Derom Bangun.
According to GAPKI, there are 5.2 million hectares of oil palm plantations in Indonesia, with some one million hectares not yet productive due to the immaturity of the one- to three-year-old palms.
The productive plantations would be capable of producing about 14.7 million tons of crude palm oil (CPO) this year.
With the proposed additional three million hectares, the country's CPO output would jump to at least 23 million tons over the next five years, said Derom.
"We just want the government to pay attention to us. Our foreign-exchange contribution last year amounted to some US$6 billion. This is a huge industry but one that faces many constraints on expansion," said Derom.
During the meeting, GAPKI urged the government to help create a positive view of the industry from the environmental perspective, rather than the current widespread opposition to the establishment of plantations from local communities and NGOs.
"The government is now trying to help the industry avoid disputes with local communities over the establishment of new plantations. It is agreed that everyone should be kept informed to ensure that the new plantations don't damage the environment," Agriculture Minister Anton Apriyantono said.
In order to achieve this goal, the minister urged industry players to quickly set up the proposed palm oil council, which would specifically deal with the problems faced by the industry.
The council, which would also include several government officials among its membership, would also handle promotion and research efforts for the industry using dues paid by its members in line with the value of their exports.
Anton also urged the industry to forego higher profits from exports by selling palm oil locally to help develop the country's biodiesel industry, which was seen as essential to alleviating the country's dependence on more expensive fossil-based fuels.
"For the sake of the national interest, I hope the industry will sacrifice some of its profits in order to develop the biodiesel industry," he said.
In response to this request, Derom said the industry would be unwilling to sacrifice profit without the government doing anything to help the industry.
"The government should learn from Malaysia. CPO producers there receive a subsidy for selling their oil to the biodiesel industry. Their government is active and very serious in developing this kind of fuel," said Derom.
He said that CPO exports from Malaysia would eventually decline because of an increase in local demand for palm oil from the biodiesel industry.
Malaysia and Indonesia are the world's largest CPO producers, with a combined market share of more than 80 percent.
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