Indonesian Government Urged To Save Oil Palm Growers From Bankruptcy

November 01, 2008

Indonesian Government Urged To Save Oil Palm Growers From Bankruptcy

JAKARTA, Nov 1 (Bernama) -- After exempting crude palm oil exporters from export fee in the wake of the global economic crisis, the Indonesian government has been urged to save self reliant oil palm growers in some provinces from bankruptcy, ANTARA news agency reported.

Bankruptcy is now threatening them because of a sharp drop in the prices of fresh oil palm fruit bunches to lower than production cost.

Yulman Hadi, a member of Golkar party faction in the West Sumatra Legislative Assembly (DPRD), called on the provincial and district administrations of regions, which happen to be oil palm fruit production centres, to show their political will in saving thousands of self reliant oil palm growers from bankruptcy's in the current economic slowdown."

At present, oil palm growers are on the brink of bankruptcy in the wake of the sharp drop in the price of fresh oil palm fruit bunches (TBS)," Yulman Hadi said here on Friday.

"If this condition is ignored, it is not impossible that the farmers will really become bankrupt, affecting the tax revenue and other income of the regional administration, in addition to massive lay offs of workers of the oil palm plantations," he said.

The impact of the US financial crisis turned out to have caused a drop in the price of fresh oil palm fruit bunches which eventually inspired the growers to allow their oil palm fruits to rot in the fields, because the cost they have to pay for harvesting the bunches is much higher than the price of the fruits per kg.

The West Sumatra province is one of palm oil producers in the country. The regional administration should not ignore the fate of oil palm growers, as they often fall into the brunt of the crisis, pushing them on the brink of bankruptcy.

If this condition is ignored, the farmers will automatically fall into a state of uncertainty which may make them feel frustrated with their businesses after growing oil palm trees on their lands. Consequently, the negative side of prolonged frustration could result in a fatal action as what happened in the 1990s during Soeharto's regime where disgruntled clove growers burned their clove crops," Yulman said.

According to him, if the oil palm growers are too frustrated, it is feared they they may also burn their crops unless the government pay attention to their fate.In order to prevent such destructive action, the government, oil palm businessmen and relevant agencies need to find ways and means to raise the price of fresh oil palm fruit brunches by at least 10 percent of production cost, he added.-- BERNAMA

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