Oil palm seedling deficit causes import smuggling

The Jakarta Post, Jakarta

Indonesia's annual need for around 30 to 40 million oil palm seedlings has increased smuggling of palm seeds and caused low quality, low yield seeds to flow into the country, a customs official says.

Makmur Barus, chief of the Plant Quarantine Station in Pontianak, West Kalimantan, told The Jakarta Post last week that Entikong, the land border-crossing point between Indonesia and Malaysia, was highly vulnerable to smuggling.

Most of the illegal seeds came from Malaysia, the world's largest palm oil producer, and were bound for the more than 500,000 hectares of empty land opened up by plantation owners a year, he said.

"We recently intercepted a truck smuggling through Entikong a load of Malaysian oil palm seeds from PT Wilmar Sambas Plantation. The local customs service in Entikong confiscated and sent back the commodity," he said.

However, a few weeks later the smuggled seeds resurfaced, finding their way back to the Wilmar plantation in Sambas regency, he said.

"I have reported this smuggling to the Agriculture Quarantine Agency in Jakarta and urged it to investigate the case and also initiated legal proceeding against the smuggler," Barus said.

He said smuggling endangered plantations in the province, as the new seeds could contain diseases and caused losses to the state in unpaid import duty, income tax and value added tax.

Smuggling was also a form of unfair competition, putting honest importers at a disadvantage, he said. On the flip side, receivers of illegal oil palm seeds risked being cheated and sold low quality, low yield product.

According to Minister of Agriculture Anton Apriyantono, about 400,000 ha out of the 5.5 million ha of oil palm estates in the country, have been planted with inferior seedlings, which yielded only half as much product as those of better quality.

S.M. Damanik, director for seed development at the agriculture ministry's Directorate General of Plantations, told the Post, companies did not need to resort to smuggling because palm seed import licenses were easy to obtain if the applicant met all the requirements.

"We are fully aware of the big deficit in palm seedlings and we have to rely partly on imports to meet the great domestic demand as the country is massively expanding its oil palm plantations," he said.

PT Wilmar, for example, held a license to import one million palm seeds from the Golden Hope supplier in Malaysia through Supadio Airport in Pontianak. But the firm needed to fulfill all the import procedures and the requirements imposed by the National Quarantine Agency for plant disease control and by the plantation director general for verifying the quality of seeds, he said.

None of PT Wilmar's executives in Pontianak were willing to comment on the alleged smuggling case involving the company.

However, sources within the Palm Oil Producers Association, told the Post, seed imports from Malaysia always faced big problems because the Malaysian government gave phytosanitary certificates only to seeds imported by companies wholly or partly owned by Malaysian interests.

"The Malaysian government refuses to certify seeds imported by Indonesian companies because they think the seeds are technology that should not easily be given away to foreign interests," the sources said.

Without such health certification foreign seeds could not be brought legally into Indonesia.

Another unnamed official at the ministry confirmed the certification problem, suggesting the two governments resolve this issue through a memorandum of understanding between agriculture ministries.