Structure, roles, challenges and opportunities of the oil palm industry in Indonesia: the significance of oil palm smallholders
BAMBANG DradjatThis article aims at: (1) to give wider and more in-depth information related to the structural development of the oil palm industry in Indonesia, (2) to explain the structure and socio-economic roles of the oil palm industry in Indonesia, (3) to explore the challenges encountered and emerging opportunities in recent and future development of the oil palm industry, and (4) to give emphasis to the future roles of the oil palm smallholders. A desk study was employed to search for previous findings and to gather other relevant information. The results show that the structure of the oil palm industry has changed historically since the era of colonialism. The traditional roles of the industry include various socio-economic contributions such as job opportunities, revenues for smallholders and oil palm companies, export earnings and tax revenue for the government, economic growth, and, more importantly poverty alleviation for the poor living in rural areas. Environment issues and social conflicts are among the challenges faced by the industry, whereas, the emerging issues relating to food, feed, fuel and fibre are among the opportunities potentially to be gained by the industry. Oil palm planting by smallholders to some extent has proven to contribute significantly to poverty alleviation as well as other socio-economic development. The smallholders are a part of the sustainable development of the oil palm industry. In response to the future dynamics of a strategic environment, there will be a need for an adjustment process in the Indonesian oil palm industry. While gaining from opportunities, the demands for social and environment protection should be internalized in the development of the oil palm industry. The development of smallholders should be part and parcel of the industry development otherwise the existing current issues will remain unchanged. The key to the implementation of sustainable development lies with the policies of the government of Indonesia towards sustainable development of the oil palm industry.
Tags: OIL PALM & PALM OIL INDUSTRY-Indonesia, MPOB PUBLICATIONS, oil palm cultivation, smallholders
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