SPKS Hopes B50 Programme Will Improve Farmer Welfare

The Oil Palm Farmers Union (SPKS) has expressed hope that the implementation of the B50 biodiesel programme, scheduled to commence on 1 July 2026, will not impose additional financial burdens on smallholder oil palm farmers. As one of Indonesia’s largest oil palm farmer organisations, SPKS stressed that the national energy security programme must align with improving the welfare of farmers who serve as the primary suppliers of raw materials. SPKS Chairman Sabarudin voiced support for the government’s efforts to strengthen energy security and reduce dependence on imported fuel. However, he offered critical notes regarding the policy’s governance. “SPKS supports the government’s efforts to increase the added value of palm oil commodities. However, the governance of B50 implementation needs to be evaluated if oil palm farmers end up being the most burdened party,” Sabarudin said in Jakarta on Tuesday (30/6). Sabarudin highlighted the nearly decade-long journey of the biodiesel mandate, from B15 to the planned B50. According to him, to date there has been no comprehensive evaluation of the policy’s real impact on the welfare of smallholder oil palm farmers on the ground. He asserted that SPKS does not reject the B50 programme, but rather rejects a governance scheme that burdens farmers with implementation costs. “The state must not achieve energy security and industry enjoy added value, while oil palm farmers have to pay for that success through a decline in Fresh Fruit Bunch (FFB) prices,” he stressed. One crucial point highlighted by SPKS is the increase in CPO export levies, which directly impacts FFB prices at the farmer level. Based on the organisation’s calculations, the increase in export levies from 10 percent to 12.5 percent could potentially depress FFB prices by approximately Rp833 per kilogram. This price decline significantly impacts farmers’ monthly incomes based on land area. Nationally, SPKS estimates that total losses for oil palm farmers could reach Rp499 to Rp500 billion per month due to the decline in FFB prices. Sabarudin reminded that the projected economic benefits of B50, estimated at Rp24.68 trillion, must not come at the expense of a 20 percent reduction in farmer incomes.