Palm Oil: Global Potential of Indonesia PART 2

Status ManagementBased on the status of concessions , oil palm plantations are divided into three , namely people's estates , private estates , and country estates . Most large land worked by private companies , which is about 52 % , about 38 % of the people farm , and the rest is owned by the state .Areas that have the potential for the spread of oil palm development is generally found in the province of Riau , West Kalimantan , Central Kalimantan , East Kalimantan , Irian Jaya , North Sumatra , Bengkulu , Central Sulawesi , and South Sulawesi .

The main policy of the Indonesian government in developing the palm oil downstream industry is developing . This policy is done by developing industry clusters in Special Economic Zones ( SEZs ) are regulated by Law no . 39 of 2009 on Special Economic Zones ( SEZ ) , which is currently focused on the SEZ Mangke Sei - North Sumatra , Maloy - East Kalimantan , Riau and Dumai .The policy stipulates that the lower tariffs on products produced from palm oil , crude palm oil and its derivatives . It aims to increase the added value and competitiveness of the downstream oil industry in the country . Accordingly, the export tax receipts over the CPO and its derivatives are expected to decrease.Oil palm agribusiness development strategy including the integration of vertical and horizontal oil palm plantations in order to increase community food security , the development of palm oil processing business in the countryside , applying technological and institutional innovation in the context of resource utilization plantations , and market development . In its implementation , the development of oil palm agribusiness either through expansion and rejuvenation of implementing a core - plasma development with institutional strengthening through the provision of opportunities for farmers as shareholders of the company. Ownership of shares is done through the purchase of shares from the installment sale pieces outsourcing outcomes or results of the funds by farmers' organizations .Main threatsAt this time the area has high potential for oil palm development has been limited availability, and the area is still quite available and the opportunity to be developed is potentially being - low . The area of ​​low potential - being the limiting factors for the development of oil palm include :a) factor is the number of months of dry climate that ranges from 2-3 months / years that describe the distribution of rainfall in a year is not evenly distributed .b ) Topography of the area is hilly terrain with gradients of 25 % - 40 % (areas with slope above 40 % is not recommended for the development of oil palm plantations ) .c ) an effective soil depth is shallow , especially in areas with soil types that have a high content of rock and poor drainage conditions .d ) Peatlands .e ) Poor drainage on the tidal plain , plain alluvium , and peat .f ) Potential acid sulfate soil on tidal plains region .Regulatory SupportCurrently prevalent laws and policies are not in harmony and not in sync . Disharmonis regulation ( farming, forestry , environment , spatial planning , regional autonomy ) produces overlapping governmental authority so hard to do the protection , planning , management , monitoring , enforcement and recovery .problemsAlthough palm oil has great potential to be developed , but there are some issues that need to be aware of the following aspects .1 . IdeologyPotential lucrative palm oil can encourage entrepreneurs to undertake large-scale exploitation of land and existing resources . Capitalism and the free market be preferred path to profit , regardless of greater interest such as labor protection , forest conservation , etc. .To overcome this , it is necessary to have the awareness of employers that earth , water , and natural wealth that actually belongs to the Indonesian nation , and should be utilized as much as possible for the prosperity of the Indonesian people . To that end , the company must undertake corporate social responsibilities to the society as a form of corporate social responsibility .2 . PoliticsCurrently , fiscal policy ( taxation and levies ) and investment in order to permit the development of oil palm agribusiness still vary according to the existing policy officials . In areas is even worse , because fiscal policy and licensing a means that can be traded at a fantastic price for the provision of funds to support officials who will advance in local elections . This eventually lead to a high cost economy .To overcome this problem , it is necessary to the development of oil palm brint blue so that there is a definite policy in the development of oil palm .3 . EconomicsFrom the economic aspect , some of the issues that should be of concern is the determination of government policy in the form of progressive CPO export duty ; land ownership by foreign oil ; decline in palm oil prices and rising production costs ; and the gap between the income of smallholder oil palm plantations .To overcome this problem , the government should change any policies that do not support the Indonesian palm oil exports . Especially for industries located in SEZs can be facilitated by the form of SEZ incentives : incentives income tax and income tax for the delivery of goods in SEZs ; land tax for a certain period and facilitation of land acquisition procedures ; Additional value-added tax , excise , and luxury goods ; tariff reductions ; facilitation of local tax incentives and permit acquisition . Governments also need to change the investment climate so as not to harm the national interest . In addition, the necessary increase in productivity of existing land and increased knowledge of oil palm growers to reduce the income gap between smallholder oil palm plantations .In an effort to revitalize the estate , the government needs to provide ease in matters relating to : ( 1 ) investment and financing , such as the provision of investment loans and interest subsidy by the government for rejuvenation , rehabilitation and expansion of oil palm plantations , ( 2 ) land management and governance space , such as the establishment and utilization of productive land for oil palm plantation development in Kalimantan border area , ( 3 ) management of the environment and natural resources , such as development and participatory management of natural resources , ( 4 ) infrastructure development , ( 5 ) human resource development and empowerment farmers , ( 6 ) provision of incentives , funding research and technology development , ( 7 ) trade policy that puts the interests of the nation , ( 8 ) the promotion and marketing of products , and ( 9 ) provision of tax incentives and levies .4 . Socio-CulturalThe existing problems of socio-cultural aspect is the magnitude of the rate of Indonesian forest deforstasi largely due to the expansion of oil palm plantations ; proliferation of fake palm seeds ; conversion of peatlands into oil palm land that contributes to a very broad emission of greenhouse gases and contribute to the seasonal air quality problems ; destruction of biodiversity , corruption in licensing ; and not in harmony and synchronization of existing laws and policies .To speak against this, there needs to be reform policies, especially the evaluation of the existing licensing procedures , the existence of a legal obligation audit and environmental audit , as well as law enforcement .In addition, the need pendeketan the industrialized countries to support the achievement of their emission reduction commitments by acquiring ' carbon credits ' ( Certified Emissions Reductions or CERs ) through assistance to developing countries in achieving sustainable development ; support REDD + programs ; application of the Environmental Impact Assessment ( EIA ) and the principles of sustainable palm oil organizations ( Roundtable of Sustainable Palm Oil - RSPO ) strict ; as well as increased coordination among relevant stakeholders .5 . Defense and SecurityConflict of land is a major problem in the palm oil sector . In Indonesia , Sawit Watch have documented more than 500 land dispute while WALHI recorded 200 cases of conflict in West Kalimantan . To overcome this it is necessary persuasive approach to the land owner , the recognition of customary rights protected by the Constitution , land reform the licensing system , law enforcement , and the implementation of corporate social responsibilities to the community . It should be understood that the root of the conflict is often due to factors welfare masyaraka