Plantation Sector Set for Steady Growth: Govt

Plantation sector investment is forecast to grow by 11 percent per year over the next five years while the amount of land used for palm oil plantations will jump by almost 20 percent, according to an Agriculture Ministry forecast released last week.

In 2010, total plantation investment, including palm oil, rubber, cocoa, coffee and sugar cane plantations, is expected to be Rp 45.18 trillion ($4.79 billion), up 4.3 percent on 2009. By 2014 it’s expected to reach Rp 68.5 trillion, according to the ministry.

The new investment will be spent on increasing the amount of land used for plantations and intensifying production on existing plantations.

Achmad Mangga Barani, the ministry’s director general of plantations, said small-scale farmers would continue to generate for the bulk of plantation investment.

Last year, small-scale farmers accounted for 89.6 percent of investment in the sector with the government and large-scale private growers accounting for 5.2 percent each.

Out of the five plantation crops, the amount of land devoted to palm oil is expected to increase the most over the next five years. Currently, there are 7.5 million hectares of palm oil plantations in Indonesia producing 18.7 million tons of crude palm oil. This is forecast to increase to 8.1 million hectares producing 23.2 million tons of CPO this year, producing 28.4 million tons of CPO by 2014 ­— an 18.7 percent increase in plantation area.

The total land area of cocoa plantations is expected to increase to 1.6 million hectares producing 988,000 tons of cocoa beans in 2010, from 1.4 million hectares producing 755,000 tons of cocoa beans last year.

Rubber, sugar and coffee plantations are not expected to increase significantly in size over the next five years because of price volatility, the ministry said.

The chairman of the Indonesian Rubber Producers Association (Gapkindo), Asril Sutan Amir, said the government should improve rubber industry infrastructure if quality is to improve.

The plantation sector employs 19.7 million people, almost half of the total work force in Indonesia’s agriculture sector.

Sumail Abdullah, chairman of the Indonesian Palm Oil Growers Association (Apkasindo), noted that small-scale farmers played a major role in developing palm oil plantations compared to private enterprises and government-owned companies. He said the government should provide small farmers with supportive regulations and easier procedures.

“Simple banking procedures for lending and easy banking access, as well as simplifying the land certification process, will help farmers develop their plantations,” Sumail said.

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