Palm Partnership Delivers the Inclusive Economy

The growth of oil palm gardens in addition to attracting the growth of economic activities directly related to palm oil also attracted rural and urban economic sectors (inclusive economic growth)

The partnership of Indonesian people-corporations palm oil developed since 1980 that is Special PIR, Local PIR, Transmigration PIR, PIR KKPA and PIR Plantation Revitalization, has opened access as well as making farmers as one of the important actors in Indonesian palm oil. Originally palm folk developed in the pattern of nucleus-plasma only. The success of the plasma-core pattern attracted local farmers’ investments to grow oil palms that became known as independent people palm.

The growth of independent people’s palm plantations is faster than that of oil palm plantations so that people’s palm plantations dominate the national people’s palm plantations. The partnership has brought Indonesia’s palm revolution, which among other things is marked by an increase in the share of palm folk and ushered Indonesia into a “king” of world CPO.

In addition, in the context of regional development partnerships have also managed to organize synergy of private investment, state-owned enterprises, people and government into a big-push strategy investment in the oil palm plantation area that gave birth to new economic growth centers. Growth of oil palm plantation both core, plasma and independent farmers encourage the development of small-medium enterprises (cooperatives) (UKMK) engaged in urban industrial goods / services suppliers, as well as traders of agricultural products / fisheries / livestock for the food needs of community oil palm plantations. In the next step, the growth of oil palm plantations especially after producing palm oil (CPO) in the area develops residential centers, offices, markets, etc. in such a way that as a whole becomes an agropolitan (new agricultural cities). The Big-push strategy spawned new, inclusive palm oil-based growth centers in rural areas.

According to the Ministry of Transmigration and Labor (2014), until 2013 at least 50 rural / backward areas have developed into new growth areas with CPO production base. Among the Bahar River (Jambi), Pematang Panggang and Peninjau (South Sumatra), Arga Makmur (Bengkulu), Sungai Pasar and Lipat Kain (Riau), Paranggean (Central Kalimantan) and other areas. Most of the CPO production centers have evolved into sub-district and new districts in rural areas.

The new economic growth centers in the area due to the development of oil palm plantations are as follows: (1) North Sumatera Province (Stabat, Belarang, Sei Rampah, Limapuluh, Trading, Rantau Prapat, Aek Kanopan, Aek Nabara, Pinang City, Sosa, Sibuhuan , Panyabungan and others), (2) Riau Province (Pasir Pengaraian, Bangkinang, Siak Sri Indrapura, Rengat, Tembilahan, Bengkalis, Bagan Siapi-api, Kuantan Bay, Dumai, Pekanbaru and others), (3) South Sumatera Province such as Lilin River, Tugumulyo, Pematang Panggang, Bayung Lencir, Musi Rawas, Peninjau and several cities to the western region of South Sumatra, among others from Muara Enim City to Lahat City), (4) Jambi Province (Sarolangun, Sungai Bahar, Sengeti, Kuala Tungkal and others), (5) Central Kalimantan Province (Sampit, Kuala Pembuang, Pangkalan Bun, Kasongan and others), (6) East Kalimantan (Sangatta, Tenggarong, Tana Pase, Tanjung Redeb, Nunukan, Sendawar and others ), (7) Ka Province South Kalimantan (Batulicin, Kotabaru, Pelaihari and others), (8) Sulawesi Province (Mamuju, Donggala, Bungku, Luwu, Pasangkayu and others).

The development of new inclusive palm oil-based growth centers attracts and integrates rural and urban economies. The new economic growth centers based on oil palm in the countryside became a market for both rural and urban products.

The results of the PASPI study (2016), for example the value of transactions (sales) products produced in urban areas and marketed to the community of oil palm plantations (oil palm growers, employees of oil palm plantations) reached Rp. 336 trillion / year. While the transactions (sales) between rural agricultural products (produced by food farmers / farmers / fishermen) marketed to the community of oil palm reached Rp. 92 trillion / year. This consists of sales of food farmers Rp. 54.6 trillion / year, breeder sales Rp. 24.1 trillion / year, and fisherman sales Rp. 13.7 trillion / year.

In other words, the growth of oil palm gardens not only attracts the growth of economic activities directly related to the palm but also attracts the rural and urban economic sectors simultaneously. Such economic characteristics are called inclusive economic growth.

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