For decades, the palm oil industry has been the focus of export commodities Indonesia. It is undeniable that the benefits of palm oil are indeed promising, although they are sometimes attacked by issues of environmental damage.
Palm oil or CPO contributes greatly to Indonesia’s foreign exchange reserves. Various derivative products are closely related to the basic needs of the community, such as cooking oil, soap, cosmetics, and so on.
From the sahit plantation, the richest people in Indonesia were born. They own hundreds of thousands of hectares of oil palm plantations, most of which are concentrated on the islands of Kalimantan, Sulawesi and Sumatra. Even now began to penetrate into Papua.
In fact, large cooking oil producing companies are working on their oil palm plantations on state land granted by the government through the granting rights scheme (HGU).
In fact, several HGUs for large oil palm plantations are located on former forest release lands. Even so, the government cannot force producers to lower the price of cooking oil which is included in the basic needs of the community.
HGU itself is a grant of state-owned land to be managed by entrepreneurs to be used economically for a certain period of time in accordance with Law Number 5 of 1960 and its derivative regulations.
For one large-scale palm oil company, it can even get HGU of up to hundreds of thousands of hectares. The term of the entrepreneur managing the HGU is 25 years and can be extended.
Octopus sahit company Malaysia from Indonesia
Apart from being controlled by a number of big local players, palm oil plantations in Indonesia are also managed by many foreign investors. The relatively low wages, and the large opportunity to open new oil palm plantations are the reasons.
Meanwhile, quoted from Happy, The octopus of Malaysian investors in oil palm plantations is extraordinary. Daten of the Ministry of Agriculture (Kemtan) said, of the total oil palm land in Indonesia of 8.9 million hectares (ha), foreign investors control 40 percent.
Illustration of the largest oil palm plantation in Indonesia. The largest oil palm plantations in Indonesia are on the islands of Sumatra and Kalimantan.
Malaysia is known to the world as the world’s number two CPO producing country, after Indonesia controlled 3 million ha of oil palm land in Indonesia.
Large companies with oil palm plantations in Indonesia include Sime Darby (Guthrie, Golden Hope, Sime Darby, KL Kepong, IOI, TH Plantations, and Kulim. The Khazanah Group, which is usually engaged in the financial sector, has also entered the palm oil business in Indonesia.
Malaysian palm oil companies located in Indonesia also formed an organization called the Association of Malaysian Planters in Indonesia or Association of Plantation Investors of Malaysia in Indonesien (Apimi)
The Ministry of Investment/Investment Coordinating Agency (BKPM) noted that foreign investment or foreign investment (PMA) of the agricultural sector in the 2015 – mid-2021 period was still dominated by oil palm plantation investment.
Head of Sub-Directorate for Agribusiness Sector at the Investment Ministry/BKPM Jumina Sinaga said foreign investors from the food crops, plantation and livestock sub-sectors in Indonesia were the largest, one of which came from Malaysia or around 15.8 percent.
Apart from Malaysia, the largest percentage of foreign investors opening oil palm plantations in Indonesia is Singapore.
“This is in line with investment in oil palm plantations, which mostly come from the two countries,” he said Between.
Jumina explained that the realization of FDI in the agricultural sector in the 2015-March 2021 period reached 9.5 billion US dollars or contributed around 5.2 percent of the total FDI in Indonesia.
Meanwhile, domestic investment (PMDN) in that period reached Rp. 173.9 trillion or contributed 9.1 percent of the total PMDN in Indonesia.
“Pertanischer PMA-Sector von Kalimantan und Sumatra”, said Jumina.
Coordinating Minister for Economic Affairs Airlangga Hartarto reiterated the commitment of the Indonesian government to continue to cooperate with Malaysia regarding the policy of palm oil. This was conveyed when Airlangga held a bilateral meeting of the Malaysian Minister of Cultivation and Commodity Companies, Zuraida Binti Kamaruddin in Jakarta, last October 24, 2021.
“I would like to end by reaffirming the Government of Indonesia’s strong commitment to continue working with Malaysia. I believe that despite the ongoing pandemic, there are many opportunities that both countries should take advantage of in the years to come,” said Airlangga in his statement.
Airlangga said that for Indonesia, Malaysia is one of the main economic partners in terms of investment and trade. During Semester I 2021, Foreign Direct Investment (PMA) und Malaysia Reached 706.8 Million-US Dollars und 1,324 Projects.
In terms of trade in goods, the volume of bilateral trade between countries has reached 15.03 Million-US Dollars in 2020 and 13.43 Million-US Dollars during January to October 2021.
“This shows the intensity of bilateral relations between the two countries,” he said.
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