President Directs Cooperatives to Enter Palm Oil Business Chain

Minister of Cooperatives Ferry Juliantono stated that President Prabowo Subianto has directed cooperatives to be involved in the palm oil industry business chain, from plantation management and crude palm oil (CPO) processing to derivative products, in order to create a fair trading system. “Previously, everything was private; the plantations were private, the CPO was private, the derivative products were private. Now, under the President’s direction, cooperatives must be involved not only in the plantations but also in the production process right through to the derivative products,” Ferry said during a press conference in Jakarta on Thursday. According to Ferry, the involvement of cooperatives in the entire palm oil value chain is part of efforts to strengthen the people’s economy while ensuring that farmers gain greater added value from the palm oil commodity. He noted that the palm oil business chain, from plantations to downstream industries, has largely been dominated by private companies. Through cooperatives, the government wants to open up greater space for the community to enjoy the economic benefits of processing and marketing palm oil products. “We received many complaints from our palm oil farmer cooperatives. They queue for cooking oil. It is an irony that people who own palm oil plantations are queuing for cooking oil. This is a model that we consider unfair,” he said. For this reason, Ferry assessed that cooperatives are an instrument to create a fairer palm oil trading system. He added that cooperatives will not only manage plasma plantations but will also be encouraged to enter the processing sector and downstream products. “And we can even get involved in derivative products, such as cooking oil and others,” Ferry stated. As part of this effort, the Ministry of Cooperatives, together with the state-owned enterprise PT Agrinas Palma Nusantara (Persero), has signed a memorandum of understanding (MoU) to build a cooperative-based palm oil plantation ecosystem. Through this cooperation, cooperatives will be involved in managing Agrinas Palma Nusantara’s plasma palm oil lands, while also receiving institutional assistance, human resource capacity building, and management strengthening to become professional business partners. Ferry also said the Ministry of Cooperatives will inaugurate a cooperative-based CPO mill in Musi Banyuasin, South Sumatra, at the end of July or early August 2026. The mill, which stands on an area of approximately 3,100 hectares with a production capacity of 60 tonnes per hour, will serve as a model for cooperative palm oil development in other regions. In addition to the palm oil sector, Ferry also stated that he will involve cooperatives in the development of other strategic agricultural commodities, such as soybeans, maize, and cassava, to build a business ecosystem that involves the community more broadly through cooperatives.