Single-Door Export Policy Must Include Fair Price Guarantees for Farmers, Says POPSI

The Indonesian Palm Oil Farmers Organisation (POPSI) believes the single-door export policy needs to be accompanied by a mechanism that guarantees farmers retain bargaining power and fair prices.

POPSI Chairman Mansuetus Darto, in a statement in Jakarta on Thursday, said this follows the potential impact of the policy on millions of independent smallholder oil palm farmers who have long held a relatively weak bargaining position in the supply chain.

“Independent smallholders have long been at the weakest end of the supply chain in terms of bargaining power. If palm oil exports are centralised without guarantees of standard pricing and fair governance, farmers will be the first to be affected,” said Darto.

“We do not reject the government’s intention to organise exports, but this instrument must not become a new layer that profits from farm-gate prices,” he added.

He stressed that the government needs to ensure the single-door export policy does not turn into a new layer in the trade chain that actually takes profit from farm-gate prices.

He said the concern is considered relevant given that around 40 percent of Indonesia’s oil palm plantations are smallholder-owned.

“National plantation data also records that around 2.5 million smallholders manage approximately 6.5 million hectares of oil palm land,” he said.

Darto said it is important for the government to establish clear and binding governance standards, including public accountability mechanisms and independent oversight, before PT Danantara Sumber Daya Indonesia (DSI) carries out its function as a single sales agent.

Meanwhile, environmental organisation Satya Bumi considers this increasingly important because DSI will be dealing with strategic commodities such as palm oil and nickel-based ferro alloy, which have complex supply chains and involve many business actors.

Satya Bumi Executive Director Andi Muttaqien believes the centralisation of export authority needs to be accompanied by strong governance, transparency and oversight standards.