The contribution and challenges of smallholders in the oil palm industry.

from THE JAKARTA POST -- FRIDAY, DECEMBER 03, 2010 The oil palm industry is one of the most important industries in Indonesia. Oil palm plantations have expanded from around 120,000 hectares in 1968 to more than 7.5 million hectares to date. Oil palm plantations and smallholders have also expanded from plantations in only three provinces to 19 provinces. Sumatra is the largest area accounting for 69.85 percent, followed by Kalimantan and Sulawesi accounting for 25.98 percent and 2.95 percent, respectively. From 2003 up to now, the oil palm industry has grown consistently in line with the growth in market demand for vegetable oils, in particular palm oil.

Aside from its role as a source of foreign earnings and employment, for Indonesia, the oil palm industry is considered important for several other reasons. Palm oil is the major edible oil that is produced and consumed domestically. Palm oil is also an important raw material for industrial manufacturing. Palm oil is a primary source of income in rural areas for the present and is likely to be so in the future. The income of smallholders …