Govt plans world's largest oil palm plantations

Govt plans world's largest oil palm plantations

Rendi A. Witular, The Jakarta Post, Jakarta

The government is working on the development of the world's
largest integrated oil palm plantation, including processing
facilities, which would run along the 850 kilometer-long border
with Malaysia in Kalimantan.

The government expects more than 500,000 jobs will be created
through the project and oil palm production will increase by some
2.7 million bunches annually, Minister of Agriculture Anton
Apriyantono told The Jakarta Post recently.

The establishment of the plantation -- which will start
producing by 2010 -- and its supporting industry is estimated to
cost approximately Rp 5.5 trillion (some US$567 million) over the
next five years.

"The project is aimed at strengthening our border against our
neighbor Malaysia, as well as reducing the prosperity gap between
our people living along the border and those in Malaysia," said
Anton.

Anton said his ministry was tasked with coordinating the
development of the plantation, including attracting local and
foreign investors and providing seedlings and farming equipment.

Foreign investors interested in the business are required to
form a joint venture with local investors, he added.

Due in part to a lack of development, the border between
Indonesia and Malaysia in Kalimantan has become a haven for
illegal loggers, many backed up by law enforcers, in smuggling
out logs from protected forests.

Anton said the government would initially focus on developing
oil palm plantations in several regencies including Sambas,
Bengkayang, Sintang and Sanggau in East Kalimantan, and in Kapuas
in Central Kalimantan.

"The end-product can be exported overseas or sold on the local
market for developing biodiesel fuel, which is much needed to
help reduce the domestic consumption of subsidized premium
gasoline. Therefore, the plantation has huge prospects," said
Anton.

Aside from oil palm, several areas near the border will be
cultivated as rubber plantations with an estimated output of some
135,000 tons of dried rubber annually, he said.

The development of the plantations will involve the Ministry
of Manpower and Transmigration in providing workers, the Ministry
of Public Works in building roads and opening up access, and the
Ministry of Forestry in land acquisition.

Ministry of Manpower and Transmigration Fahmi Idris told The
Jakarta Post his ministry would intensify transmigration programs
for recruiting unemployed people in densely populated provinces,
such as those in Java, to be relocated into the planned
plantation areas.

"We are currently working with the Ministry of Agriculture on
the mechanism to relocate unemployed people or farmers from
densely populated provinces to border areas under the
transmigration program," said Fahmi.

Indonesia is the world's second largest exporter after
Malaysia of oil palm -- a raw material for, among other things,
cooking oil, soap and detergent.

Output from the two countries makes up about 85 percent of
yearly global oil palm production.

According to data from the Central Statistics Agency (BPS),
the country produced about 12 million tons of crude oil palm last
year, with about 8.66 million tons exported to China, India,
Pakistan, Bangladesh and the Netherlands.