InfoSAWIT, PESISIR SELATAN – Allegations of a Fresh Fruit Bunch (FFB) palm oil price cartel in Pesisir Selatan Regency, West Sumatra, have triggered growing concern, with farmer groups and political organizations warning that independent Smallholders are bearing the brunt of unusually low purchase prices.

The issue was raised by Larshen Yunus, Chairman of the Central Executive Board of Gabungan Rakyat Prabowo Gibran (GARAPAN), who argued that the prolonged disparity in FFB prices between Pesisir Selatan and neighboring regions warrants serious investigation.

“This is no longer an ordinary problem. The state cannot lose to palm oil price mafias. If cartel practices and price manipulation are truly occurring and causing hundreds of billions of rupiah in annual losses to farmers, law enforcement agencies must step in,” Larshen told InfoSAWIT on Friday (29/5/2026).

FFB Prices in Pesisir Selatan Considered Unreasonable

According to multimedia data compiled by GARAPAN, independent Smallholders in Pesisir Selatan currently sell FFB at prices ranging between Rp1,880 and Rp2,105 per kilogram.

Those figures are significantly lower than prices reported in neighboring Sijunjung Regency, where FFB prices have reached approximately Rp2,830/kg.

The price gap—estimated at around Rp700/kg—has raised questions among growers and observers, especially since palm fruit quality between the regions is not believed to differ substantially.

Larshen argued that the situation has persisted for too long without meaningful intervention from local authorities or relevant institutions.

“The reality is that farmers are forced to accept low prices because they have no alternative. Situations like this are vulnerable to exploitation by certain groups seeking excessive profits at the expense of ordinary people,” he said.

Speculation has also circulated among local communities regarding possible coordinated pricing practices among several palm oil mills (PKS), allegedly making it difficult for farmer prices to improve.

High Weight Deductions Add to Farmers’ Burden

Beyond low prices, farmers in Pesisir Selatan have also complained about high weighing deductions imposed by mills.

According to GARAPAN, deductions range from 9–12 percent per transaction—significantly higher than deductions in areas such as Sijunjung, where rates generally fall between 4–5 percent.

“It is strange that the same palm fruit receives better prices and lower deductions when sold elsewhere. This is something that must be investigated openly and transparently,” Larshen said.

He stressed that company claims regarding lower oil extraction rates (rendemen) for Pesisir Selatan fruit should be validated through an open audit involving government agencies, academics, and farmer representatives.

Calls for Investigation and Stronger Oversight

GARAPAN has urged the West Sumatra Provincial Government, the Pesisir Selatan Regency administration, and law enforcement agencies to conduct a comprehensive investigation into the local palm oil trading system.

According to Larshen, if cartel practices are proven, the matter could constitute an economic crime affecting a broad segment of society.

“If monopoly and cartel practices are indeed occurring, this cannot be tolerated. The state must protect farmers so they do not continue to become victims of economic manipulation,” he said.

GARAPAN also called on Indonesia’s Business Competition Supervisory Commission (KPPU), police, and prosecutors to intensify oversight.

At the same time, the West Sumatra Provincial Government is reportedly preparing a governor regulation governing FFB pricing for plasma and independent Smallholders, alongside the establishment of a 2026 monitoring task force.

Larshen welcomed the initiative but emphasized that regulations must deliver real protection for growers rather than remaining merely administrative measures.

“Regulations must stand with farmers. They cannot look good on paper while remaining weak in field supervision,” he said.

He further encouraged local authorities to accelerate the formation of stronger farmer cooperatives and organizations to improve growers’ bargaining position against mills.

Based on agricultural data cited by GARAPAN, independent oil palm plantations in Pesisir Selatan cover around 44,000 hectares. Assuming production of one ton per hectare harvested twice monthly, the Rp700/kg price gap could translate into potential farmer losses approaching Rp600 billion annually.

Larshen warned that losses of such magnitude could significantly slow rural economic growth in one of West Sumatra’s key palm-producing areas.

“If that amount of money circulated among farming communities, the local economy would move much better. This issue cannot be underestimated,” he concluded. (T2)