Role of Oil Palm in Poverty Alleviation

Transcription

1 Role of Oil Palm in Poverty Alleviation Zulkifli Alamsyah Agribusiness Department Faculty of Agriculture University of Jambi - Indonesia zalamsyah@unja,ac,id Presented in the Twentyfirst Session of the Conference of the Parties (COP21). Paris, Dec 3, Indonesia Pavilion Hall 2B

2 2 Outline: Introduction Overview of Indonesian Oil Palm Plantation The economic of Oil Palm Sector The Role of Oil Palm in Poverty Alleviation Conclusion

3 Introduction CPO in the Oils & Fats Market

4 4 Oil palm is the most efficient oilseed crop in the world 10 major oilseed area in 2012 Yield and Production Cost of Major Vegetable Oil 17 major oils & fats: global production in 2012 Source: - Oil World (2009) - Oil World (2013) in Sime Darby (2014)

5 World exports, consumptions and prices of vegetable oils 5 World Export, 2012 World Prices (USD /T), 2012 World Consumption, ,1 41, ,2 14, Palm Oil Soybean Rapeseed Sunflower Oil Oil Oil Source: Oil World (2013) in Sime Darby (2014)

6 6 Indonesia is the world s largest producer and exporter of crude palm oil (CPO) Palm Oil: Exports and Production of Key Countries (Mn T) Share of Production 2014 Exports Share of Exports 2014 Production Source: Mielke (2014, 2015) (Source: Index Mundi, 2015)

7 Overview of Indonesian Oil Palm Plantation

8 8 Distribution and Centers of Oil Palm Plantation 24% 65%

9 9 Oil Palm Plantation in Total Land 65% 24% Share of oil palm plantation in total land

10 Area and Production of Oil Palm Plantation 10 Total Area (Mil, Ha) Share of Area by Category of Producers 13,00 12,00 60% 11,00 40% 10,00 20% 9,00 y = 0,6224x + 7,3525 R² = 0,9837 8,00 7,00 0% , Gov 2014 Total Production (Mil, Tonnes CPO) Smallholders Privates Share of Production by Category of Producers 35,00 30,00 60% 25,00 40% y = 1,647x + 19,406 R² = 0, ,00 20% 15,00 0% ,00 5, , Source: DG of Estate Crops (2015) 2014 Gov Smallholders Privates

11 Palm Oil Export by Type of Products Palm Oil Exports 11 Bil, US $, Mi, Tonnes Crude Palm Oil; 23,50% Other Palm Oil; 70,43% Total Volume and Value of Palm Oil Export 30 Crude Oil of Palm Kernel; 1,64% Other Palm Kernel Oil; 4,43% 25 Export by Destination Countries, India; 21,3% Others; 40,3% 10 5 China; 10,3% Total Value, FOB (Bil US $) Total Volume (Mil Tonnes) Source: Statistics Indonesia (2015) Pakistan; 7,9% Malaysia; 2,5% Singapore ; 3,4% Netherland; 5,3% Egypt; 4,4% Banglades h; 4,6%

12 The economic of Indonesia Oil Palm Sector

13 Palm Oil Export is the Biggest Contributor in Total Non Oil&gas Net Exports 13 Share (%) Bil, US$ Non Gas&Oil Net Export Palm Oil Net Export Source: Bank of Indonesia in PASPI (2015) 0

14 14 Output and Value Added Growth Rate of Oil Palm Plantations Faster than Other Sectors in Indonesian Economy, Oil Palm Plantation Vegetable Oil Industry Agricultural Sector National Output Oil Palm Plantation Vegetable Oil Industry Agricultural Sector National Value Added Source: PASPI (2015)

15 15 Oil Palm Plantation Stimulates Other Sectors of Indonesian Economy Linkages Value Sectors Backward 1,51 Surplus Reinvestment Fertilizers, Chemical, Pesticides Labor Financial Oil Palm Seeds Agriculture Building Transp, Trade, Rest/Hotel, Comm,,etc Other Sectors 33,94 18,43 17,31 9,85 4,64 3,56 4,07 4,19 4,74 Forward 1,42 Cooking oil industry Oleochemical industry Food industry Oil Palm Plantation Others 80,00 14,00 0,31 4,64 0,05 Multiplier Output Income Employment Value Added Share (%) Index Multiplier Indeces of the Oil Palm Plantations Source: Statistics Indonesia, I-O Table 2008

16 16 Labor Absorption in the Oil Palm Plantation Million 3,50 3,00 2,50 2,00 1,50 1,00 0, Farmers 2014* 2015** Labors Source: DG of Estate Crops (2015) Employment Multiplier: o for all sectors of the economy = 1,84 o for the oil palm sector = 1,05 (Source: Indonesia I-O Table 2008) Palm oil development has the potential to increase the absorption of labor in all sectors of the economy,

17 The Role of Oil Palm in Poverty Alleviation

18 18 Comparison of RGDP Oil Palm-based Economy and Non Oil Palm-Based Economy (Mil, IDR) Riau North Sumatera Oil Palm Non Oil Palm Source: PASPI (2015) Non Oil Palm Central Kalimantan South Sumtera Oil Palm Oil Palm Non Oil Palm Oil Palm Non Oil Palm

19 Effect of CPO Production on RGDP 19 (Cases in 4 major oil palm producer Provinces) South Sumatera Source: PASPI (2015) Central Kalimantan

20 20 Oil Palm Farmers Earn Higher Income than Non Oil Palm Farmers Source: PASPI (2015)

21 21 Comparison of Oil Palm Household Income and Poverty Line (Million IDR / yr) Urban Poverty Line Rural Poverty Line 30 Plasma Oil Palm Farmer's Income Independent Farmer's Income Non Oil Palm Farmer's Income Non Oil and Gas National Income Per capita Source: PASPI (2015)

22 22 Oil Palm Plantation Reduce number of poor people in rural area and improve income distribution 25,00 Sumatera Utara 20,00 Riau 15,00 Sumatera Selatan % of Poor People in 4 Major Oil Palm Producing Province 10,00 Kalimantan Tengah INDONESIA 5,00 0, ,50 0,40 North Sumatera Riau South Sumatera Central Kalimantan INDONESIA 0,30 0,20 0,10 0,00 Source: Statistics Indonesia (2015) Gini Ratio in 4 Major Oil Palm Producing Province

23 Conclusion

24 24 Conclusion Oil palm plantations play an important role in Indonesian economic development : 1. Source of income through foreign exchange earnings 2. Contribute highly significant to the growth of output, employment and added value of other economic sectors. 3. Boost economic growth in rural areas through increased employment, improved infrastructure, and create new sources of economic growth. 4. Increase farmers income and reduce poverty.

25 Thank you...

26 26 Success stories

27 Wource: WWF on Youtube,