SELLING PRICE OF PALM AT FARMERS’S LEVEL STILL HIGH

The Indonesia Chamber of Commerce was confident that Palm Replanting Program and El Nino would have no significant impact in palm growers. Besides, leading national palm growers like Sinar Mas still bought farmer’s yields at reasonable price.

“Price of fresh plum at farmer’s stage remained stable in spite of adverse climate. We buy from farmer way above Rp.400 per kg. as there was anxiety in Apkasindo. “The standard price was enough for farmers”. Franky O. Widjaja, Chairman of KADIN told Business News.

Palm procedure companies would not buy palm at low price from farmers. The program was in parallel with Replanting Plan of Palm. age of plan which had passed over 25 years would be less fertile. The production output was only around 13 tons of fresh plum per year if were over-aged. The Replanting Program had taken all aspects into consideration including under planting and inter planting. “Just like our Sinar Mas Land, around 15 thousand ha needed replanting. The productions was around 2 tons per ha”.

The program was for 2 million ha of soil of self reliant farmers. The production would hopefully not drop in spite of problems like El Nino, over supply, etc. The calculation was follows: Farmer’s cost of living was USD 8 thousand. Assuming there were 2 million farmers, the total amount would USD 16 billion. Cost of replanting including cost of living for the whole family for 4 years would come to USD 500 thousand per month per hectare. With USD 12 million per year, it means there was extra cost of living. The production would be increased by 3 million tons. ̋There would be extra income for one million farmers. Beside there is land saving of 1 million hectares. Funding still rely on banks, there is interest subsidy for farmers, but we also request aid from the World Bank”.

There effect of El Nino on Palm production would be felt next year. Almost certainly projected  productions output of 33 million tons this year would not be same next year, Production slump due to El Nino might come to 2- -30 percent. ̋Meaning next year our production would be 30 million tons or probably even 20 million tons. Let’s pray some rain would fall”. (SS)

Business New - September 11, 2015