Indonesia: SPI calls for increased role of peasant-cooperatives in Palm Oil processing

MEDAN: Early in July, President Joko Widodo inspected the red meal oil research process at the Palm Oil Research Center (PPKS), in Medan, North Sumatra. Red Oil itself is a palm oil innovation that has the potential to be used as functional food with health benefits.

Responding to this, Chairperson of the Indonesian Farmers Union (SPI) Henry Saragih said that SPI appreciated President Jokowi’s support for developing red meal oil.

“The lands that have been reformed, which farmers have planted oil palms and bear fruit, of course they need a palm oil mill (PKS) as well as a food oil factory so that their palm oil can be procured at a decent price. This is where the role of cooperatives emerges to manage the palm oil mill and the red oil mill. The cooperative buys palm oil at a fair price, and sells its derivative products in the form of cooking oil at affordable prices in the hands of consumers,” he explained.

“The presence of cooperatives, which of course are also managed by farmers, will certainly break the dependence on transnational corporations that have been “regulating” world palm oil prices, including Indonesia,” he continued.

Henry said that based on measurable research issued by PPKS, the production of red cooking oil can be developed by cooperatives and micro, small and medium enterprises (MSMEs) because of the smaller investment value compared to commercial cooking oil factories.

“Mr. Edwin Lubis, Managing Director of PPKS also explained that the logistics costs of producing this red cooking oil are also small or almost non-existent so it is very possible to be built in the centers or in rural areas producing palm oil,” Henry said.

“Not to mention in terms of health, the advantage of red cooking oil lies in its nutritional value and pro-vitamin A and E content which is higher than cooking oil in general,” he continued.

Henry added that this is a moment that should not be missed by the government to overhaul Indonesian palm oil.

“Therefore, SPI encourages the government to be firm in reforming. It is enough for palm oil farmers to feel the fall of FFB prices at the nadir,” he added.

Henry Saragih (right-end) poses with President Jokowi and Minister of Cooperatives & SMEs Teten Masduki during a visit to PPKS Medan, North Sumatra.

“The government’s commitment to support the development of PKS and red edible oil by cooperatives in the form of funding, and requirements, is very good,” concluded Henry, who was also present during President Jokowi’s visit to PPKS Medan.

Source: SPI website.