Economist confident downstream processing is key to boosting plantation commodity value

Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti believes that downstream industrial processing is a strategic step to increase the added value of Indonesia’s plantation commodities. Contacted in Jakarta on Monday, Esther Sri Astuti said that by processing commodities into intermediate or final products, Indonesia has the opportunity to gain higher economic value while strengthening competitiveness in domestic and global markets. Esther stated that the concept of downstream processing is highly relevant when applied to various plantation commodities such as coffee and cocoa. According to her, processing these commodities into intermediate or final products will increase their selling value compared to merely exporting raw materials. Nevertheless, Esther emphasised that downstream processing must not be solely oriented towards increasing economic added value. She argued that the success of downstream processing must also consider social and environmental aspects so that the benefits can be enjoyed sustainably. She explained that industrial downstream processing needs to consider three main aspects: economic, social, and environmental. Besides increasing product prices and added value, downstream processing must also be able to create jobs, help alleviate poverty, and avoid negative environmental impacts. “This means industrial downstream processing is not only concerned with added value and higher product prices, but it must also provide benefits to the social environment, job creation, poverty alleviation, and so on,” she said.