Head of Palm Oil Producers Proposes Mandatory Replanting Programme

Jakarta — The chairman of the Indonesian Palm Oil Association (Gapki), Eddy Martono, has reported that whilst Indonesian palm oil production increased in 2025, reaching approximately 51 million tonnes of crude palm oil (CPO) and 56 million tonnes total production including palm kernel oil (PKO), the government’s Smallholder Palm Oil Rejuvenation Programme (PSR) remains stagnant.

Martono made these remarks during a meeting with Agriculture Minister Amran Sulaiman at the Agriculture Ministry office on Wednesday, 11 March 2026. He attributed the production increase primarily to replanting activities undertaken by private palm oil companies over recent years, which have now begun producing yields.

However, Martono argued that national production potential could be significantly higher if the PSR programme operated optimally. He identified the primary obstacle as farmer reluctance to fell existing palm oil trees, particularly given current fresh fruit bunch (TBS) prices of approximately Rp3,000 per kilogram.

Farmers fear losing their income during the waiting period before new plantations mature, with many expressing concerns about their livelihood during replanting. Martono relayed their concerns to the minister, noting that farmers worry: “What shall I eat if I cut down my trees?”

To address this issue, Martono proposed establishing support schemes for farmers during the replanting transition period, such as temporary livelihood guarantees or intercropping systems. He also recommended implementing a mandatory replanting policy for smallholder palm oil plantations.

Martono emphasised that replanting would significantly increase farmer productivity. He noted that yields could double from approximately 10 tonnes per hectare annually to 20 tonnes per hectare annually following rejuvenation, with new plantations becoming productive within just 2.5 years.

Martono further highlighted the importance of increased palm oil production to meet rising domestic demand, particularly to support biodiesel programme expansion. Industry estimates suggest that implementing a B50 biodiesel programme would require approximately 16 million tonnes of CPO, compared to 11 million tonnes of CPO consumed for biodiesel at B40 levels during 2025.