Structuring Commodities Towards a Fair Market

The state must be present to close distortion gaps, strengthen institutions, and ensure that all actors, especially farmers, obtain fair benefits from the value chain. Jakarta (ANTARA) - Indonesia is a major global force in the agricultural sector, particularly plantation commodities. The latest data shows that Indonesia’s palm oil production in 2024 reached approximately 47.47 million tonnes, with exports of around 32.36 million tonnes and foreign exchange earnings exceeding 22 billion US dollars. In the cocoa sector, about 96 percent of Indonesia’s exports are processed products, indicating partial success in downstream processing. Meanwhile, national rubber production is around 2.1 million tonnes, and coffee about 700 thousand tonnes per year, positioning Indonesia as one of the world’s major producers. However, behind these achievements, market weaknesses are evident. The value added enjoyed domestically is not yet optimal. Indonesia’s coffee exports, for example, are still dominated by raw products with an export value of around 1.6 billion dollars, while processed products contribute only a small portion. For the sugar commodity, the situation is more problematic, with national sugar production at about 2.2 - 2.3 million tonnes, while domestic needs reach more than 7 million tonnes, so imports still dominate the national sugar market. At the same time, farmer welfare indicators such as the Farmer Exchange Rate (NTP) show relatively high figures, namely around 125.35 in March 2026. Even for the smallholder plantation subsector, it exceeds 150. This figure can serve as an indicator of farmer welfare, including to assess the reality of inequalities in the field. Meanwhile, in some plantation centre locations, there are still many challenges regarding price fluctuations, dependence on middlemen, and limited market access. The phenomena indicate that the issues at the farmer level are not solely about production, but rather market structure and trading arrangements. In many cases, the price difference from upstream to downstream does not fully reflect distribution costs, but indicates distortions in the value chain.