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INDONESIAN INDONESIAN INDONESIAN INDONESIAN PLANTATION PLANTATION PLANTATION PLANTATION
DEVELOPMENT POLICY DEVELOPMENT POLICY DEVELOPMENT POLICY DEVELOPMENT POLICY
KUALA LUMPUR, 19th SEPTEMBER 2012
BY
RISMANSYAH DANASAPUTRADIRECTOR PERENIAL CROPS , DIRECTORATE GENERAL OF ESTATE CROPS,
MINISTRY OF AGRICULTURE
Outline2
� INTRODUCTION� MP3EI� INDONESIAN PALM OIL
DEVELOPMENT� ISPO� CONCLUSION
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introduction
� plantation ? � plantation charecteristic� type of bussiness plantations� type of commodity cultivated estate and
smallholders � the phases of plantation development
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challenge of plantation development
o productivity and quality of plantation product is low.
o inadequate infrastructure � the production road, access, port � in eficiency distribution and marketing.
o exports of estate crops production are dominated by primary products � value added in domestic is less profit.
o conflict with local communities.
o increasing demands for sustainable product.
No Commodity 1979 2010 Growth/
year (%)PR PB TOT PR PB TOT
1 Rubber 1.926 458 2.384 2.921 523 3.444 1,19
2 Coconut 2.521 59 2.580 3.969 70 4.010 1,43
3 Palm Oil 0 261 261 3.387 4.997 8.384 11,84
4 Coffee 578 46 624 1.162 46 1.208 2,15
5 Tea 40 68 108 56 65 121 0,37
6 Cocoa 11 25 36 1.558 77 1.650 13,13
7 Cashew Nut 85 3 88 569 1 570 6,21
8 Pepper 63 1 64 179 4 183 3,45
9 Others 751 28 779 1.852 175 6.390 7,02
Total 5.978 946 6.924 15.653 5.958 21.611 3,74
ESTATE CROPS DEVELOPMENT AREA (1979 – 2010)
Source: Indonesian Plantation Statistic , DG of Estate Crops 2010-2012
‘000 ha
No Commodity 1979 2010 Growth/
year (%)PR PB TOT PR PB TOT
1 Rubber 1.926 458 2.384 2.921 523 3.444 1,19
2 Coconut 2.521 59 2.580 3.969 70 4.010 1,43
3 Palm Oil 0 261 261 3.387 4.997 8.384 11,84
4 Coffee 578 46 624 1.162 46 1.208 2,15
5 Tea 40 68 108 56 65 121 0,37
6 Cocoa 11 25 36 1.558 77 1.650 13,13
7 Cashew Nut 85 3 88 569 1 570 6,21
8 Pepper 63 1 64 179 4 183 3,45
9 Others 751 28 779 1.852 175 6.390 7,02
Total 5.978 946 6.924 15.653 5.958 21.611 3,74
ESTATE CROPS DEVELOPMENT PRODUCTION (1979 – 2010)
Source: Indonesian Plantation Statistic , DG of Estate Crops 2010-2012
‘000 ha
linkage the plantation development with mp3ei
� Except for palm oil, plantation is still difficult to access bankcredit funds, as Bank technical requirements difficult to meet, sothe garden was not maintained, and ultimately lowproductivity;
� As a continuation of the development is done now, preparedMasterplan for Acceleration and Expansion of Indonesia'sEconomic Development (MP3EI) years from 2011 to 2025.
� MP3EI intended to promote the establishment of high economicgrowth, balanced, equitable and sustainable, so that Indonesiawill be able to stable himself as the top ten countries in theworld in 2025 and the six countries of the world in 2050.
COUNTINUED
� MP3EI done breakthrough approach rather than the "BusinessAs Usual", with the aim to accelerate and expand economicdevelopment through the development of eight (8) majorprograms, which include: the manufacturing industry, mining,agriculture, marine, tourism, telecommunications, energy anddevelopment national strategic area.
� The main focus of the 8 program covers 22 major activitiesinclude: oil palm, rubber and cocoa.
� Strategy implementation is done by integrating MP3EI 3(three) main elements.
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MP3EI(Master Plan for the Acceleration and Expansion of Indonesia's Economic Development)
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THE FRAMEWORK DESIGN OF MP3EI
indonesian economic corridor� Based on these three a predetermined strategy, development plans are six
economic corridors multiplier it covers the whole area of the country.� In each economic corridor will be focused on the development of a number of
major economic activities in accordance with their respective advantagesterritory.
MENDORONG INVESTASI SWASTA DI 6 KORIDOR EKONOMI
“Central Production and
Processing the earth proceeds and the National Energy
Granary”
KoridorSumatera
" Central Production and Processing of
National Energy Mines & Granary”
'' Center for Production and Processing of
Agricultural Product, Plantation and the National Fisheries ''
” Producing and processing the abundant natural resources and the
prosperous human resources "
‘ Gate ofNational Tourism and Supporting National
Food ''
" Driving force Industry and National
Service "
'‘Centre of Production and Processing National Fisheries proceeds''
KoridorKalimantan
Koridor SulawesiKoridor Sulawesi
Koridor PapuaKoridor Bali Nusa Tenggara
Koridor Jawa
Sumatera Economic Corridor" Central Production and Processing the earth proceeds and the National Energy Granary"
Sector Focus
1. Palm Oil/CPO � Focus on up-stream industries
through increased productivity and replanting.
2.Rubber� Improve harvest product and extending
downstream
3. The Coal� Increase mining production through
accelerated rail infrastructure.
Key infrastructure needed:
Ports:- Metro Medan, Dumai, PalembangRailroad / Road:- Trans Sumatra (Train tracks / road), including tracks for CPO in Riau.Power Plant in Sumatra- Power Plant in Sumatra to foster downstream industriesMine-mouth and a processing plant for coal in South Sumatra
Overview
Consisting of 7 provinces: Medan, Pekanbaru, Jambi, Palembang, Lampung, Serang, Jakarta
The corridor is estimated to increase by ~ 3.4x PRDB of $ 139 billion in 2010 to $ 473 billion in 2030 with growth rate of 6.3% compared corridor baseline estimate of 4.5%
Java Economic Corridor" Driving force Industry and National Service "
Sector Focus - a broad manufacturing base:
1. Food products � focus to move to capitalize on the
growing resistance of domestic demand
2. Textile � Seize the domestic market from imports
and strengthen the state production source selection
3. Conveyance Industry � Develop capabilities for
value-added processing of higher, attract more
native processing equipment.
Overview
Consisting of 4 provinces: Jakarta, Bandung, Semarang and Surabaya
The corridor is estimated to increase by ~ 4.2x PRDB of $ 304 billion in 2008 to $ 1.282 billion in 2030 with an estimated growth rate of 7.5% compared corridor baseline estimate of 5.8%
Key infrastructure needed:
Port:• Jakarta, Semarang, Surabaya
Railroad / Road:• Trans Java (Jakarta-Cikampek-Bandung-
Semarang-Surabaya)
Power Plant • Expansion Port in Jakarta
• Power Plants in West Java and Central Java
Overview
Consisting of 4 provinces: Pontianak, Palangkaraya, Balikpapan and Samarinda
The corridor is estimated to increase by ~ 2.6x PRDB of $ 59 billion in 2008 to $ 152 billion in 2030 with an estimated growth rate of 3.6% compared to the corridor baseline estimate of 5.8%
Sustainable Industries in the Future1. Fisheries� expanding shrimp aquaculture industry
2. Wood� Build a sustainable forest industry and expand
into high value-added production (paper)
3. Rubber � Increasing rubber industry
Sector Focus1. Oil and Gas� Exploration more to ensure stable
production growth
2. Palm Oil�Improve harvest product and extending
downstream
3. The Coal� Increasing production with building the
infrastructure that can reach the mine in the outback
Key Infrastructure Requirements:
River Port : Barge Loading Facility that connects the Port Railway to carry coal through a river; Barito River and the
Mahakam
Railway ���� Required to make the coal mining in the
hinterland economically feasible; Kal-Teng
Toll Road � a better connectivity between oil palm
plantations and mines to increase production of CPO;
Central and West Kalimantan
Kalimantan Economic Corridor " Central Production and Processing of National Energy Mines & Granary”
"
Sulawesi Economic Corridor'' Center for Production and Processing of Agricultural Product, Plantation and the National Fisheries ''
Sector Focus:
1. Food Crops � Increase productivity which ensures national food security
2. Plantation � Switch to products with higher added value
3. Fisheries� Reduce marine fisheries catchment, establishing aquaculture production
4. Nickel Mines � Increasing nickel exports of intermediate goods
Key Infrastructure Requirements:Irrigation - The need for increased food and plantations agricultural harvest; South Sulawesi.
Port Facility - Required for better handling for the products of agricultural industry; Port of Makassar, Manado, Kendari.
Supply of Electricity - Electricity is a key requirement for the processing of nickel; Southeast Sulawesi
Overview
Consisting of 5 provinces: Manado, Gorontalo, Kendari, Mamuju and Makassar
The corridor is estimated to increase by ~ 4.4x PRDB of $ 21 billion in 2008 to $ 94 billion in 2030 with an estimated growth rate of 7.7% compared to the corridor baseline estimate of 6.0%
Bali-NT Economic Corridor ' Gate of National Tourism and Supporting National Food ‘'
Sector Focus
1. Tourism � Increase the number of tourists
visiting and tourism spending. Utilizing Bali as a
gateway to promote visits to other popular tourist
destination
2. Agriculture and Livestock � Increase
productivity of land and developing the production
to downstream
Overview
Consists of 3 provinces: Denpasar, Mataram and Surabaya
The corridor is estimated to increase by ~ 4.3x PRDB of $ 18 billion in 2008 to $ 76 billion in 2030 with an estimated growth rate of 7.6% compared to the corridor baseline estimate of 5.6%
Key Infrastructure Requirements:
Airport: expansion of Ngurah Rai Airport, the construction of a new international airport in Bali
Port: Tanah Ampo cruise terminal / Benoa
Roads: Trans-Bali toll road, access Sarangan - Tj. Benoa
Energy: Power generation in Bali
Papua-Kep.Maluku Economic Corridor “Processing the abundant natural resources and the prosperous human resources “
Sector Focus
1. Mining (notably copper and gold) �encourage exploration of new mines through infrastructure support. Encouraging "forward integration" with the activities of downstream production
2. Agriculture and Plantation ���� Increasing production through Merauke Integrated Food and Energy Estate (MIFEE) and produce high value-added products
Key infrastructure needs
Roads - Trans-Papua road and access roads MeraukePorts - Ports in Jayapura and MeraukeEnergy - Develop Hydropower Urumka to reduce reliance power plant fuel
Overview
Consisting of five provinces: Sorong, Manokwari, Wamena, Jayapura and Merauke
The corridor is estimated to increase by ~ 6.3x PRDB of $ 13 billion in 2008 to $ 83 billion in 2030 with an estimated growth rate of 9.6% compared to the corridor baseline estimate of 7.0%
the strategic efforts to support the plantation development for mp3ei
1. Increased Productivity � replanting, rehabilitation and intensification of the use of superior seed by using a suitable agroinput.
2. Providing technology package � monoculture, diversification, integration with livestock??
3. The improvements and efficiency of transportation, � garden paths, access roads, ports.
4. Increased in the domestic value added � agro-based plantation development both inside and consumer countries.
5. Expansion of marketing � traditional markets, to new markets??
6. Sustainable Plantation Development Demands.
SUPPORT THE GOVERNMENT BUDGET, DIRECTORATE GENERAL OF ESTATE CROPS FOR SUMATERA ECONOMIC CORRIDOR
Activity
2012 2013
Area (Ha)Budget (billion
IDR)Area (Ha)
Budget (billion
IDR)
1. Plantation Revitalization (oil
palm, cocoa, rubber)
79,355 7.3 79,355 3.0
2. Cocoa cultivation 1,425 11.8 600 5.1
3. Oil palm cultivation 6,035 33.7 620 8.5
4. Rubber cultivation 13,091 64.6 7,350 55.3
INDONESIAN PALM OIL DEVELOPMENT
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2010
2011
2020(target)
�2007
PALM OIL AREA (IN THOUSAND Ha)
SH : 2.752 GC : 606PC : 3.408TOT: 6.776
SH : 3.387 GC : 631PC : 4.367TOT: 8.385
SH : 3.620 GC : 637PC : 4.652TOT: 8.909
SH : 3.804 GC : 640PC : 4.700TOT: 9.144
SH : SmallholderGC :Goverment CompanyPC : Private CompanyTOT: Total
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2010
2011
2020
PALM OIL PRODUCTION (IN THOUSAND TONNES)
�2007
SH : 6.358 GC : 2.117PC : 9.189TOT: 17.664
SH : SmallholderGC :Goverment CompanyPC : Private CompanyTOT: Total
SH : 8.459 GC : 1.890PC : 11.609TOT: 21.958
SH : 8.628 GC : 1.938PC : 11.942TOT: 22.508
SH : 10.946 GC : 2.345PC : 21.052TOT: 34.343
VOLUME & VALUE EXPORT OIL PALM
2007 - 2011
*) Provisional
NO YEAR
VOLUME (000/ton) VALUE (Thousand US$)
Palm Oil (CPO)
Others Total Palm Oil (CPO)
Others Total
1 2007 5.701 6.174 11.875 3.739 4.130 7.869
2 2008 7.904 6.387 14.291 6.561 5.814 12.375
3 2009 11.120 5.709 16.829 6.710 3.658 10.368
4 2010 11.158 5.134 16.292 9.085 4.384 13.469
5 2011*) 10.428 6.008 16.436 10.961 6.300 17.261
eksportir & importir utama cpo dunia
*) Provisional
� Indonesia (45%)
� Malaysia (43%)
� Thailand (2%)
� Nigeria (2%)
� Colombia (2%)
� Negara lainnya (6%)
eksportir importir
� China (20%)
� India (15%)
� EU (12%)
� Pakistan (7%)
� USA (2,5%)
� Japan (2%)
� Mexico(1.5%)
� Negara lainnya (40%)
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CPO PRODUCTION
Source: Oil World, 2008
Indonesia
44.5%
Malaysia
41.3%
Ecuador
0.9%
Thailand
2.7%
Others
4.9%
Cote d'lvoire
0.8%
Colombia
1.9%
Nigeria
2.0%
Papua New
Guinea
0.9%
CountryVolume
(‘000 tonnes)% Share
Cote d’lvoire 330 0.8
Nigeria 860 2.0
Colombia 800 1.9
Ecuador 420 0.9
Indonesia 19100 44.5
Malaysia 17735 41.3
Thailand 1160 2.7
Papua New Guinea 400 0.9
Others 2100 4.9
Total 42904 100
Indonesia + Malaysia = 86% of world production
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Area of 2.002,77 ha (Industrial
area = 60%, commercial and
supporting areas = 40%)
SM-ISPOIC MASTER PLAN
Development Downstream Industries
29Source: Oil World
Industry to be developedat short-term
- development of infrastructure on 46 ha- establishment of a 75 ton FFB/h POM
- 2 x 3.5 MW biomass power plant - 400 tpd kcp- 2.2 MW biogas power plant
Lanjutan ...........
- biodiesel + surfactant + beta carotene (1st stage)-fatty alcohol (1st stage)-olein (1st stage)
2010 - 2011
2009 - 2010
2011 - 2012
30Source: Oil World
Lanjutan ...........
- biodiesel + beta carotene + surfactant (2nd stage)- fatty alcohol (2nd stage)- olein (2nd stage)
- Industry of biomass for energy
- development of infrastructure on 104 ha
2012 - 2013
2015 - 2016
2014 - 2015
2016 - 2017
2013 - 2014
- 20 MW biomass power plant
- derivative oleochemicals
Industry to be developedat medium-term
2017 - 2018
2018 - 2019
- industry of biomass for energy- derivative oleochemicals
- industry of biomass for energy
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- derivative oleochemicals
- derivative oleochemicals
- 100 MW power plant
- derivative oleochemicals
Industry to be developedat long-term
- development of infrastructure on 640 ha
- paper- wood
2019 - 2020
2020 - 2021
2021 - 2022
2022 - 2023
2023 - 2024
2024 - 2025
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Hilirisasi Industri Kelapa Sawit Bernilai Tambah Tinggi
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INDONESIAN
SUSTAINABLE PALM
OIL (ISPO)
THE IMPORTANT ROLE OF PALM OIL THE IMPORTANT ROLE OF PALM OIL THE IMPORTANT ROLE OF PALM OIL THE IMPORTANT ROLE OF PALM OIL
IN INDONESIAIN INDONESIAIN INDONESIAIN INDONESIA
• Source of Income and Employment Source of Income and Employment Source of Income and Employment Source of Income and Employment ����more than 3.5 million people work in oil more than 3.5 million people work in oil more than 3.5 million people work in oil more than 3.5 million people work in oil palm plantationpalm plantationpalm plantationpalm plantation
• Poverty AlleviationPoverty AlleviationPoverty AlleviationPoverty Alleviation
• Regional Development Regional Development Regional Development Regional Development
• Source of Food and ESource of Food and ESource of Food and ESource of Food and Energnergnergnergy y y y ���� edible oil, edible oil, edible oil, edible oil, biofuelsbiofuelsbiofuelsbiofuels
• Support Domestic/National IndustrySupport Domestic/National IndustrySupport Domestic/National IndustrySupport Domestic/National Industry
• Export Earning of Non Oil and Gas Sector Export Earning of Non Oil and Gas Sector Export Earning of Non Oil and Gas Sector Export Earning of Non Oil and Gas Sector ����US$ 14 billion/yearUS$ 14 billion/yearUS$ 14 billion/yearUS$ 14 billion/year
OIL PALM: IN FACTS
1. the most efficient vegetable oil: compare with soy bean, rape seed, coconut, sun flower � high productivity and low cost of production
2. oil palm is perennial crop and produced in the developing countries � other vegetable oils are mostly produced in the developed countries.
3. palm oil is consumed by more than 160 countries in the world.
4. production of indonesia and malaysia contributes to 86% of total world palm oil production. since 2006, indonesia has been the highest palm oil production in the world (now is more than 20 million tons)
PROBLEM AND CHALLENGEPROBLEM AND CHALLENGE
• ACCUSATIONS : Deforestation, Forest Degradation, Killing of Wildlife Habitat, etc.
• Increase of Green House Gases (GHG) Emission. Indonesia was accused to be the third rank of world GHG emitter
• Unilateral Commitment from Indonesia to reduce GHG emission to 26% in 2020 (Copenhagen, Dec. 2009)
• MORATORIUM :On primary forest and peat land
• The implementation of ISPO Certification Standard
GOVERNMENT POLICYGOVERNMENT POLICY
• Declaration of Agricultural Minister’s decree No.19/Permentan/OT.140/3/2011 dated 29 March 2011 onIndonesian Sustainable Palm Oil (ISPO).
• Agricultural Minister’s decree No. 26/Permentan/OT.140/2/2007 dated 28 February 2007 on Estate CropPermit and DGE decree No. 07/Permentan/ OT.140/2/2009dated 4 February 2009 on Assessment of PlantationPerfomance.
• Palm oil plantations classified as Grade I, Grade II, and GradeIII can directly apply for ISPO certification.
• Palm oil plantations classified as Grade I, Grade II, and GradeIII have to implement ISPO by 31 December 2014.
• ISPO implementation is mandatory.
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� to raise awareness about the importance to producesustainable palm oil and to accelerate indonesiansustainable production
� to enhance indonesian palm oil competitiveness inthe world market
� to support ghg emission mitigation programme
� to support indonesian government unilateralcommitment in copenhagen (2009) and programmebased on loi indonesia and norway (2010)
OBJECTIVES OFOBJECTIVES OFOBJECTIVES OFOBJECTIVES OF ISPOISPOISPOISPO
INDONESIAN SUSTAINABLE PALM OIL INDONESIAN SUSTAINABLE PALM OIL INDONESIAN SUSTAINABLE PALM OIL INDONESIAN SUSTAINABLE PALM OIL (ISPO)(ISPO)(ISPO)(ISPO)INDONESIAN SUSTAINABLE PALM OIL INDONESIAN SUSTAINABLE PALM OIL INDONESIAN SUSTAINABLE PALM OIL INDONESIAN SUSTAINABLE PALM OIL (ISPO)(ISPO)(ISPO)(ISPO)
• Comprising of 7 Principles, 39 Criteria, and 128 Indicators
• Based on rule/act and law in Indonesia(Ministry of Agriculture, Ministry of Environment, Ministry of Manpower, Ministry of Forestry, and National Land Agency).
• As Government rule, ISPO will be notified to the World Trade Organization (WTO).
ISPO is Indonesian Sustainable Palm Oil (Certification) System:
7 (SEVEN) PRINCIPLES AND CRITERIA7 (SEVEN) PRINCIPLES AND CRITERIA
1. Licensing System and Plantation Management
2. Implementation of Technical Guidelines for Oil Palm
Cultivation and Processing
3. Environmental Monitoring and Management
4. Responsibility towards Employees
5. Social and Community Responsibility
6. Community Economic Empowerment
7. Sustainable Business Improvement
ASSESSMENT ISPOASSESSMENT ISPO
PHASE I:o Government assess palm oil companies and classify, as follows :Grade I (Very Good)Grade II (Good)Grade III (Moderate)Grade IV (Poor)Grade V (Very Poor)
o Palm oil companies classified as Grade I, Grade II, and Grade III can directly apply to be audited for ISPO certification.
o Companies classified as Grade IV and Grade V should performfollow-up suggestions. The license will be revoked when fail to doso after warnings.
PHASE II: Certification is conducted by independent certification body, such asNational Accreditation Committee (NAC) or certification bodyaccredited/acknowledged by NAC.oo
ISPO CERTIFICATE SYSTEM
� ISPO is mandatory. Non-compliance based on standard will notbe tolerated until plantations carry out corrective actions withina certain time limit.
� Holding company may receive certificates on behalf of theholding (group) by applying certification for plantations orgroup of within the same system and fully supervised by holdingmanager.
� Surveillance is conducted once a year during the term of thecertificate. The first surveillance is conducted one year from thelast audit.
� The life certificate is valid for 5 (five) years. Re-assessment willbe conducted before the five-year period is ended.
SUPPLY CHAIN CERTIFICATION SYSTEMSUPPLY CHAIN CERTIFICATION SYSTEM
• ISPO certified palm oil plantations may choosestatus to obtain traceable supply chain certificate.
• REQUIREMENTS:- All facilities in the palm oil supply chain must
meet ISPO requirements- Statement that the production, procurement, and
use of certified palm oil meet ISPO requirements
EXPORT MODEL
1. SEGREGATION (TRACEABLE)
2. MASS BALANCE (MIXED BETWEEN SUSTAINABLE AND UNSUSTAINABLE PALM OIL)
3. BOOK AND CLAIM (UNTRACEABLE, BUT HAS TO BE CERTIFIED).
CONCLUSION45
� except for palm oil, in indonesia many plantation are generallyowned by small farmer in particularly for rubber and cocoa thalalmost 85% of the mass is owned by the small farmer, which havelimited access to market, capital, technology and farmers’sinstitutions
� MP3EI designed to provide a solution to accelerate and expand theestate crops development of Indonesia by integrating three mainelements : (a) to develop the economic potential of the region in thesix economic corridors Indonesia (Sumatera, Java , Kalimantan,Sulawesi, Bali and NT, Papua), (b) strengthen national connectivityby locally integrated and globally connected and (c) strengthen thecapacity of national resources, science and technology to supportthe development of programs in any economic corridor.
continued .....
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� There are three commodities such as palm oil, rubber and cocoa tobe major commodities in developing MP3EI.
� Particularlly for Indonesia oil palm commodity, government makepolicy to develop Sustainable Palm Oil through compulsory palm oilstakeholder for ISPO certified
� There are oppotunity as far as possible for all investors both in thecountry to take advantage of the opportunities that exist in thescheme MP3EI to contribute to the economic development ofIndonesia in increasing investment and job creation.
PROYEKSI PROYEKSI PROYEKSI PROYEKSI LUAS LUAS LUAS LUAS AREALAREALAREALAREAL, , , , PRODUKSI PRODUKSI PRODUKSI PRODUKSI DAN PRODUKTIVITAS DAN PRODUKTIVITAS DAN PRODUKTIVITAS DAN PRODUKTIVITAS KELAPA SAWIT KELAPA SAWIT KELAPA SAWIT KELAPA SAWIT
TAHUN 2020 TAHUN 2020 TAHUN 2020 TAHUN 2020
Uraian/Tahun 2008 2009 2010 2015 2020
Area
(1.000 ha)
7.364 7.873 8.036 9.112 9.127
Produksi
(1.000 tons)
17.340 19.324 19.760 29.624 34.343
Produktivitas (kg/ha) 3.611 3.711 3.888 4.400 4.500
Thank youThank youThank youThank you