PALMOILMAGAZINE, JAKARTA – Erlangga, a researcher at Tata Kelola Sawit Yayasan Madani Berkelanjutan, revealed that the input-output analysis conducted by Yayasan Madani Berkelanjutan indicates that the CSF (CPO Subsidy Fund) allocated for biodiesel subsidies does not significantly benefit production balance compared to programs directly focused on palm oil plantation development.
“If the CSF funding were redirected to palm oil plantation development, we would see a 6.52% increase in production output in that sector. Additionally, there would be related increases in worker production (0.59%) and housing production (0.50%). However, if CSF funds are primarily used for biodiesel subsidies, the output of the biodiesel industry would rise by about 1.23%, with worker and housing production outputs only increasing by 0.31%,” Erlangga explained.
The CSF is intended to improve the welfare of smallholders, as stipulated in Law No. 39/2014 on Plantations. Unfortunately, this goal has not been fully realized.
Also Read: Will the biodiesel program increase the CPO price?
To better support the welfare of smallholders in Indonesia, the Palm Oil Plantation Fund Management Agency should revise the financing system to address current smallholder needs and enhance the formula for determining the price of fresh fruit bunches (FFB) at the smallholder level.
Yayasan Madani Berkelanjutan revealed that crude palm oil supporting fund (CSF) that should actually be developing palm oil plantations, such as, replanting program, developing the infrastructures, human resource, and others, as a matter of fact, is used to subsidize biodiesel program.
Data from Corruption Eradication Commission (CEC) also revealed that PFMA gathered CSF and its derivative up to Rp 11 billion in 2016. From the numbers, PFMA allocated 81,8% to biodiesel subsidy. There were two business groups getting the biggest allocation, they were, Wilmar Grup and Musim Mas Grup,” Program Officer Tata Kelola Sawit Yayasan Madani Berkelanjutan, Trias Fetra said.(T2)
