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More than 80 percent of the world’s smallholders and family farmers live off the land in this region and their interests and livelihoods must be safeguarded.
But since cooking oil is a basic staple food, the government should intervene to shield low-income groups and micro and small enterprises from the inflationary impact during the boom cycle.
Although the export ban was imposed only for about one month, the draconian measure inflicted devastating impacts on the industry and millions of smallholders.
Fish and shrimp famers on the northern coast of Java are dealing with the aftermath of the worst tidal inundations in at least a decade, and more flooding is expected this month.
Restricting the market of basic necessities at the government-fixed low prices usually causes long lines of consumers who tend to buy more than what they actually need.
When the government slapped a total export ban on palm oil products on April 28 through an erratic and emotionally charged policy, the prices of smallholders’ FFB fell by almost 40 percent to Rp 2,000 (US$0.13) per kilogram.
Farm gate prices remain low after the government revoked its palm oil export ban, while surging fertilizer prices have driven up production costs, smallholders say.
For at least 10 days after President Joko “Jokowi” Widodo lifted the palm oil export ban on May 23, not a single shipment of the commodity left port as a result of the entirely new and labyrinthine bureaucratic procedures imposed by the Trade Ministry.
We understand how angry the President is with the uncooperative attitude of the 10 largest integrated palm oil industrial groups.
The sunflower oil debacle should be a great opportunity for Indonesia, the world’s largest producer of palm oil with an annual output of over 55 million tons, of which about only about 55 percent is exported.