Validated Measures

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XX January 2019 | By Yos Kusuma

As one of Indonesia’s top export commodity, Palm Oil has received much attention from stakeholders both within and outside of the country. Governments, companies, oil palm farmers, and even universities collaborate in across various initiatives and partake in different research to increase oil palm productivity to ensure sustainable livelihood for the farmers, as well as the environment. During the 2018 Indonesia International Palm Oil Conference in Medan, I got the chance to speak with Professor Hermanto Siregar, Chairman of the Indonesian Agricultural Economists Association and Rector of Perbanas Institute Jakarta, regarding the role of research in Palm Oil development.

82550e3c-a117-4a67-9e2d-112bd7fc26a8.JPGThe professor had spoken about the academics’ contribution towards Indonesia’s Palm Oil industry during the Conference. The agricultural sector constitutes about 13 percent of Indonesia’s GDP, with estate crops (i.e. crops grown in plantations) contributing the biggest share, be it on the fiscal scale or in terms of employment numbers – 30 percent of the workforce in the sector (which works out to more than 5.5 million people).

However, one of the issues with Palm Oil is its productivity, with slowing or plateauing growth rate over the past five years. Professor Siregar remarked that this is mainly caused by Smallholders , who contributes more than 40 percent of the production volume, still adopting traditional farming practices, hence bringing down the overall industry average.

He believes that advancements in agricultural technology could increase labour and land productivity, which will also result in an increase in the farmers’ income. Technology could also improve the quality as well as compatibility of Palm Oil used for fuel or Biodiesel . “We are in the fourth phase of industrial revolution where cyber and physical systems converge, and physical, biological and digital technologies can provide the solutions,” he explained. This is where university research can facilitate innovation, “especially to address the food security challenge, because existing planted plots (of land) are not fully maximised.”

Various initiatives are being implemented by industry stakeholders to promote environmental sustainability and improve the welfare of farmers and workers on oil palm plantations. However, no study has been conducted to show their impact, or to evaluate the intended outcomes. “Such comprehensive studies will give the stakeholders a clearer picture and conclusion that is based on data, not assumptions. Governments, for example, will know which policies to implement, and companies will know which programmes would be most compatible with their supply chain. Universities will also have more propositions to fine tune the industry’s efforts.”

The challenges in conducting such studies vary across stakeholders. “Governments wouldn’t be able to focus solely on the study as they would have too many issues to address, universities have the capacity to do so, but would face funding issues, whereas companies wouldn’t subscribe to the research unless they could be convinced that it would be beneficial for their corporate strategies,” he explained.

Professor Siregar also shared various studies that have shown that Palm Oil is indeed sustainable. “There are researches out there with valid data. Results have shown that oil palm trees only take in slightly more water compared to Primary Forest . but compared to other Plantation crops, the claim that oil palm requires more water is debunked. Claims on adverse health effects of Palm Oil is also unfounded, as some research findings had proven otherwise.”