Oil palm seedling deficit causes import smuggling

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.