Oil Palm Should Not Disturb Other Crops: Minister

Palembang, S Sumatra, Sept 11 (Antara) - Agriculture Minister Suswono said oil palm plantations should not disturb the cultivation of other national food crops. "It is feared that farmers will halt the cultivation of other food crops and convert these plantations into oil palm plantations because oil palm has promising returns," added the minister on Wednesday. He said in 2012, oil palm plantations in the country covered 8.9 million hectares, more than rice fields, which only spanned 7.9 million hectares. He added that the expansion of oil palm plantations will not disturb existing rice farm lands. Actually, there has been a regulation on sustainable agriculture, where the function of rice fields should be changed. Food crops such as paddy are consumed by a majority of Indonesians, he asserted. After all, South Sumatra contributes rice to the entire nation; hence, the province should continue to maintain and develop rice fields, noted the minister. However, the minister admitted that oil palm is an agricultural mainstay commodity for Indonesia`s economy because the product is exported. Moreover, CPO can be processed into biodiesel. Additionally, oil palm plantations also serve as cattle ranches and help to anticipate scarce beef in the country. In the meantime, Chairman of the Indonesian Oil Palm Business Association Tukot Sipayung told the press that crude palm oil is one of the country`s mainstay products. He explained that Indonesia`s CPO exports in 2012 reached US$23 billion, and up to July this year, the value of the country`s CPO exports has been recorded at US$10.5 billion. His association has set a target of US$25 billion for CPO exports this year. The governments of Indonesia and Malaysia have agreed to increase the use of biodiesel in their respective countries to reduce the dependence on CPO exports. "The agreement was discussed in Indonesia-Malaysia bilateral meeting recently," said the chairman of the Indonesian Palm Oil Board (DMSI) Derom Bangun on Friday. Indonesia pledged to increase diesel fuel composition of B7.5 that contains 7.5 percent palm biodiesel to B10, which contains 10 percent pal biodiesel. Malaysia is expected to increase the use of biodiesel in the country from five percent to 7.5 percent. "DMSI strongly supports the agreement on the usage of biodiesel in the country," he said. Increasing biodiesel absorption in Indonesia would affect the supply and demand balance in the international market. "By reducing the supply, the CPO price is expected to automatically push up the price of farmers� fresh fruit bunches (TBS)," he said. Chairman of North Sumatra`s Indonesian Employers Association (Apindo) Parlindungan Purba said employers need government policies that support North Sumatra`s commodity export prices. After the global economic crisis, the commodity`s prices have shown a declining trend.