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Black Campaign, A Major Challenge for Palm Oil Industry

By 28 February 2017October 22nd, 2021Industry News, Uncategorized6 min read

JAKARTA – The Ministry of Trade said that the major challenge for the national palm oil industry today and the coming years is the black campaign spread overseas. The national palm oil industry is considered as non sustainable. It must be addressed well by all the stakeholders in the palm oil industry.

The Minister of Trade, M. Lutfi, said that palm oil has been the leading export product with a value of US$ 20 billion in 2013. Despite its profitability, palm oil has a considerable challenge, which should be addressed properly in order to remain as the leading commodity, namely black campaign against palm oil. “The campaign aims to destroy Indonesia’s position. The government and the businessmen have a habit like firefighters. They only solve the existing problems an never talk about plan on how to cope with it in the future,” said Lutfi at the symposium and dialogue on palm oil commodity organized by the Indonesian Chamber of Commerce and Industry in Jakarta on Wednesday (10/9).

Lutfi explained that one of the black campaign’s effects is the release of EU Labelling Regulation 1169/2011 by the European Union (EU) which requires the edible oil source to be included specifically for all food products distributed in the EU. In addition, Indonesia also got allegations of biodiesel and fatty alcohol products from the EU. The Ministry of Trade is currently questioning it to the EU Government such as France or Italy,and both countries admitted that the labelling regulation is not set by the government, but by the private sector. “Therefore, the government and the entrepreneurs must face the campaign with an advanced strategy. Most importantly, the reason they do it is due to a competition. EU labelling regulation, for example, is actually simple, they want to compete with Indonesia using vegetable oil,” he said.

Lutfi admitted that the government cannot stand against the black campaign without the help from the private sectors. All parties have the same map of palm oil, but the government and private sectors often have different data. Three government agencies, namely the Ministry of Trade, the Ministry of Forestry, and the Ministry of Agriculture have got together and carried out presentation about palm oil, but all of them have different data. “With a condition like this, it is possible that the outsiders will say that Indonesia does not have good credibility,” he said.

Lutfi explained, before imaging palm oil, it would be better if all the relevant parties compare all the data such as maps, greenhouse gas emissions, degradation, and the determination of degrading land. If we do not do it, then other parties will do it for Indonesia. “If Indonesia does not set them all, the other parties will do it. NGOs may probably say that the tree is not 1.5 meters tall, but 6 meters or more. We should set them before other people do it for us,” he added.

Lutfi claimed that the Ministry of Trade is preparing a report on the problems faced by the Indonesian palm oil industry. The report will be submitted to President Joko Widodo. The Ministry of Trade guaranteed the palm oil problems would be the top priority document to be submitted to the transition team of Joko Widodo. “This is an important issue to be addressed, because the Indonesian palm oil production will reach 60 million tons/year in the next 5-10 years,” he said.

The Ministry of Industry, MS Hidayat, also regretted the black campaign against the national palm oil industry conducted by NGOs. It was hindering the development of the local palm oil industry greatly. The government has done various ways to minimize the black campaign, but none of them worked. In fact, the black campaign that accuses palm oil industry of damaging environment is a classic problem. “Therefore, we would like to ask the entrepreneurs to actively participate fighting the black campaign by taking the NGOs to the court. This is not only the government’s responsibility, but also business to business by utilizing a legal path,” said MS Hidayat.

The Director of Indonesian Palm Oil Association (GAPKI), Fadil Hasan, also said that the black campaign by NGOs has alarmed the CPO entrepreneurs. Moreover, the NGOs have suppressed palm oil companies. “The NGOs have determined to approach the companies, therefore, many companies have been suppressed by them, e.g. they are prohibited to plant on an area because it has high carbon stock. In fact, the government has never defined the land as HCS,” said Fadil.

Competitiveness and Land

Meanwhile, the Vice Chairman of Agribusiness and Food Sector of the Chamber of Commerce and Industry, Franky O. Widjaja, said that, apart from the black campaign,  the challenge that has to be faced by palm oil in the future is the declining of the competitiveness of Indonesian palm oil industry due to the high cost of operational and logistics. On the other hand, some new competitors, such as Africa and Brazil, are emerging. Moreover, the productivity of the independent smallholders is currently low due to old or damaged crops, false seeds, poor maintenance, and inadequate access to financing and technology. “The research and development are still not optimal and uncoordinated. The dissemination of the research result is low. There is still a wide gap between the research and the implementation in the field, as well as inconsistent policy and scant policy coordination,” said Franky.

On the other hand, MS Hidayat also said that the national palm oil industry is still facing a number of challenges, one of which is the limited availability of land. Whereas, Indonesia expects to produce 40 million tons of CPO in 2020. Without the warranty of the land availability, the target will be constrained. Meanwhile, Indonesia is the largest CPO supplier in the world, thus requires a large area to meet the demand, both in local and abroad. The government is still discussing how to overcome these problems. “Another thing that has to be considered in the industry is the marketing and the consumers. The local market might be easier, but we have to do branding for export, so the government needs to intervene,” he said. (leo/eme)

Source: Investor Daily