Government Allocates Rp 332 Billion for People's Palm Oil Rejuvenation to Boost CPO Productivity

The Indonesian government has disbursed Rp 332 billion (approximately US$22.7 million based on October 10, 2018 exchange rate) for the People's Palm Oil Rejuvenation Program (PSR) by October 10, 2018. This program aims to increase palm oil (Crude Palm Oil/CPO) productivity to a minimum of 5 tons/hectare from the previous 2 tons/hectare. Furthermore, the PSR program aims to ensure sustainable palm oil plantation management in accordance with Good Agricultural Practices (GAP).

These funds were distributed to 5,873 farmers cultivating a total of 13,288 hectares of palm oil plantations across six provinces, as shown in the graph below. The largest disbursement was in South Sumatra province (Sumsel), with Rp 332.26 billion allocated to 3,172 farmers cultivating 7,262 hectares. This was followed by Riau province, receiving Rp 181.61 billion for 1,409 farmers cultivating 3,485 hectares.

Indonesia is the world's largest palm oil producer, with production exceeding 30 million tons per year from 12 million hectares of land. However, national CPO production often faces challenges in the global market, particularly in Europe. Recent events, such as Greenpeace activists boarding an Indonesian palm oil tanker in the Bay of Cadiz, Spain, highlight concerns that Indonesian palm oil plantations are damaging tropical rainforests. However, the government has not issued new permits for palm oil land clearing since 2015 and has implemented a moratorium on palm oil plantation permits through Presidential Instruction Number 8 of 2018.