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[Bisnis Indonesia] Partnership Program Can Cut Productivity Gaps

By October 31, 2017No Comments

Indonesian Minister of National Development Planning and Head of National Development Planning Agency (Bappenas) Bambang Brodjonegoro has lauded the partnership program implemented by palm oil companies to reduce the productivity gap between them and palm oil farmers, reported Bisnis Indonesia.

The gap is due to poor seed quality. An individual palm oil grower only produces about 2 to 3 tons per hectare annually, whereas a private company’s plantation productivity reaches 5 to 6 tons per hectare annually, the minister said.

As a result, there are welfare imbalances between farmers and palm oil companies, he said.

“Therefore, the partnership is considered as a solution for the productivity gap that leads to this imbalance. We are already carrying out the best practices, and we want to further expand them on a larger scale to other districts,” Bambang said.

During the same occasion, Asian Agri Corporate Affairs Director Fadhil Hasan agreed that the welfare of farmers is determined by high productivity. In palm oil plantations, partnerships can contribute to farmers’ productivity.

In addition to providing farmers with market benefits, the partnership also ensures raw material supply for the industry.

Besides that, the company also saves on costs of managing plantations as it is more efficient.

“There are some costs that companies will incur should they manage it themselves, and these costs can be eliminated by the partnership program,” he added.

He believes the partnership program will be a model of economic development in the future and that partnerships may not be just limited to palm oil plantations, but eventually also encompass coconut, cocoa, coffee and tea.

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