“We strongly object,” Palm Oil Farmers Union (SPKS) national council chairman Mansuetus Darto told The Jakarta Post on Friday, arguing the plan ignored the precarious economic reality of Indonesia’s plantation sector.

Mansuetus explained that, with an average of 130-140 trees per hectare, a farmer would face monthly tax bills reaching hundreds of thousands of rupiah per hectare.

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For Riau’s estimated 1.7 million hectares of smallholder plantations, totaling roughly 231 million trees, the levy would extract a staggering Rp 393 billion per month from farmers. 

For the province, considered the center of Indonesia’s palm oil industry, that would translate to additional annual income of Rp 4.72 trillion.

But it would cut farmers’ income by more than 6 percent, Mansuetus calculates, based on a fresh fruit bunch (FFB) price of Rp 3 million per tonne and average monthly yields of 1.2 tonnes per hectare.

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“This does not even take into account fertilizer, harvesting or transport costs,” he warned, saying margins would become “dangerously thin”.

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