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Farmers yet to benefit from CPO levy waiver
Palm farmers have expressed hope that low prices of fresh fruit bunches will start to rise significantly on the back of extended CPO export levy waiver, but warned that the policy will be in vain if regulations are poorly implemented.
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Fruitful business: Trucks line up to unload oil palm fresh fruit bunches at a palm oil-processing facility belonging to PT Karya Tanah Subur in Padang Sikabu village in West Aceh on May 17, 2022. (Antara/Syifa Yulinnas)
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he extension of the crude palm oil (CPO) export levy waiver, despite being successful in stabilizing CPO prices, has proved to be less effective in resolving the chronic issue of falling fresh fruit bunch (FFB) prices, which the government has been trying to tackle for the past few months.
In this regard, farmers’ associations have expressed the hope that the price of FFBs will start to rise significantly on the back of the extended CPO export levy waiver, but they claim that the policy may be in vain if weak regulatory enforcement is not addressed.
The CPO export levy waiver has been extended to Oct. 31. Previously, the government had announced a slashing of export levies for all palm oil derivative products until Aug. 31 to boost exports and ease high domestic inventories.
Palm Oil Smallholders Union (SPKS) secretary-general Mansuetus Darto suggested the government improve palm oil management policy in the country, for example, by renewing the moratorium on oil palm plantations.
Palm oil reform was left in limbo after the moratorium, which required government agencies to stop granting new licenses for palm oil concessions and to review existing ones every three years, lapsed on Sept. 19 last year, exactly three years after its inception through Presidential Instruction (Inpres) No. 8/2018.
“[The SPKS] appreciates the government’s move to extend the CPO export levy waiver policy, but a thorough evaluation on the use of export levy funds and their role in farmers’ prosperity is also critical,” he told The Jakarta Post earlier this week.
After over a month of the CPO levy waiver implementation, he claimed, FFB prices, while they had risen, remained relatively low, adding that the government “would need to fix the regulations on the CPO supply chain as a whole to address the problem.”
