InfoSAWIT, JAKARTA – The cheaper crude palm oil in the world since the early of 2014 influenced the fresh fruit bunch produced by the smallholders, namely the independent ones. The peak was happening in the midst of 2015 reaching US$ 530/ton.

It triggered the stakeholders to try to get the solution together with the government. One proposal was by making export citation within different pattern, not as the Out Fee but called, CPO Supporting Fund (CSF).

The collection of the fund started in the midst of 2015. The public service obligation collecting the fund is Palm oil Plantation Fund Management Agency (PFMA).

The main target of the agency in the previous was that about almost 90% of the collected fund should be used to pay the gap price between palm oil biodiesel and fossil diesel. It was good in the first place and could make the palm oil price in the world better. Since 2016, the palm oil got better and its peak was in January 2017 reaching US$ 815/ton.

In the same time, there were protests to fund usage namely from the smallholders. They thought that their portion was small enough. Finally PFMA agreed to increase the smallholders’ portion to be about 22% of the total collected fund and to pay the gap price of palm oil biodiesel, its portion decreases to be 70% only.

Unfortunately palm oil price has its own fluctuation. Because of the trade war between China and United States of America, the palm oil got cheaper again since the early of 2017 until the end of 2018.

This made the FFB of the smallholders much cheaper. For the independent smallholders, their FFB in September 2018 was about Rp 500/Kg. It was not economical to cultivate their plantations. It is normal that they started to be lazy to cultivate theirs.

Instead of increasing the FFB price to the normal price, there was suggestion to stop the CSF for temporary which PFMA manages so that the FFB price could be better. Finally the government accepted the proposal of the smallholders by publishing Regulation of Minister of Finance No. 152 / 2018.

Then what about the independent smallholders’ FFB in the future? Will it better or cheaper considering that the palm oil price in the world is in fluctuation? For more, dear readers of InfoSAWIT could read it in InfoSAWIT, November 2018. (T2)