Indonesia’s government, under the guidance of Coordinating Minister for Economic Affairs Airlangga Hartarto, is firmly committed to expanding the nation’s farming sector, particularly in palm oil production. In a recent speech, Hartarto highlighted the significant role of smallholder farmers in a recent speech: “Indonesia is the largest palm oil producer in the world, with over 16 million tons produced by smallholders.”
In 2022, the country’s palm oil production soared to 46.82 million tons, with smallholders contributing significantly. The government’s People’s Palm Oil Replanting (PSR) program is a key initiative aimed at rejuvenating 306 thousand hectares for 134 thousand farmers, supported by IDR 8.5 trillion in funding. Hartarto conveyed the government’s ambitious goal: “The President’s direction is to add 300,000 more farmers,” indicating a strong push to increase the farming community.
The government’s support extends to infrastructure development, including the provision of essential agricultural inputs and machinery, coupled with human resource enhancement through education and training. In 2023, these programs benefitted more than 7,000 individuals, with an investment of IDR 127 billion.
Hartarto stated, “The government continues to support the palm oil industry, a mainstay in our exports valued at USD 29.66 billion in 2022.” Despite this success, the industry faces challenges from the European Union’s Deforestation Free (EUDR) policy. The minister underscored the importance of addressing issues related to land sustainability data verification and ISPO Certification to maintain the industry’s global standing.
In response to the EUDR’s potential impact, the Indonesian government, in collaboration with Malaysia, has actively engaged with the European Union. Hartarto said, “The government has made a joint mission. I went … to bang on the door of the European Union so that they would not make regulations that breathe plantation imperialism. So, we want national capabilities to be prioritized.”
This step highlights Indonesia’s proactive stance in protecting its agricultural interests.
As Indonesia aims for a low-risk classification under the EUDR, the focus on sustainability and farmer welfare becomes more critical. Through Hartarto’s leadership and President Widodo’s vision, the government is charting a course for expanding Indonesia’s farming sector, positioning it as a cornerstone of the nation’s economic growth and prosperity.