The Economic Benefit of Palm Oil to Indonesia

The Economic Benefit of
Palm Oil to Indonesia
A Report by World Growth
February 2011
Alleviating Poverty through Wealth Creation
Palm oil provides developing nations and the poor a path out of poverty.
Expanding efficient and sustainable agriculture such as Palm Oil Plantations provides
small and large plantation owners and their workers with a means to improve their
standard of living.
Sustainable Development
Sustainable development of palm oil plantations and growth of the palm oil industry
in developing nations can and will be achieved through consultation and collaboration
with industry, growers, lobby groups and the wider community.
Climate and the Environment
Palm Oil is a highly efficient, high yielding source of food and fuel. Palm Oil
plantations are an efficient way of producing fossil fuel alternatives and capturing
carbon from the atmosphere.
Opportunity and Prosperity
Developing nations must be allowed the chance to grow and develop without
political intervention by environmental groups or developed nations. It is crucial that
developing nations be given the same opportunities which developed nations have
benefited from.
Property Rights
Efficient palm oil plantations and the growing demand for palm oil give smaller land
holders greater opportunities to make a living off their land, maintain their
ownership and support their rights to property and prosperity.
2 • The Economic Benefit of Palm Oil to Indonesia
Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . 4
I.
Palm Oil’s Contribution to the Indonesian
Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
II. Global Economic Importance of Palm Oil . . . . . 6
Trends in the Global Production
and Trade of Palm Oil . . . . . . . . . . . . . . . . . . . . . 6
Palm Oil and Rural Development
in Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Returns from Palm Oil Production . . . . . . . . . . 14
IV. Future Prospects for Palm Oil . . . . . . . . . . . . . . 15
Trends in the Global Consumption
of Palm Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trends in the Global Consumption
of Vegetable Oils . . . . . . . . . . . . . . . . . . . . . . . . . 9
III. Economic Importance of Palm Oil
to Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Agriculture’s Contribution to the Indonesian
Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Future Prospects for Global
Palm Oil Demand . . . . . . . . . . . . . . . . . . . . . . . . 15
Global Palm Oil Production
and Opportunities . . . . . . . . . . . . . . . . . . . . . . . 15
Key Challenges and Opportunities for the
Indonesian Oil Palm Sector . . . . . . . . . . . . . . . . 16
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Annex
Palm Oil Production and Poverty by Province . . . . 26
The Economic Benefit of Palm Oil to Indonesia • 3
Executive Summary
EXECUTIVE SUMMARY
Environmental NGO’s have been pushing a “noconversion” agenda, in an attempt to halt the conversion of forest land to agriculture, including palm oil
plantations. This agenda has extended into the operations of international organisations and governments.
In May 2010, the Indonesia and Norway signed a
Letter of Intent comprising a framework for Indonesia
to receive financial contributions from the Norwegian
Government in return for the implementation of
emission reducing policies, including a two-year suspension on all new concessions for conversion of peat
and natural forest.
In July 2010, The World Bank proposed a framework
for its engagement in the palm oil sector, acting at the
behest of environmental NGOs to toughen the policies
of the Group on the terms financial support is provided to Palm Oil projects. A revised version of the framework was released for consultation in January 2011.
Restrictions on the conversion of forest area will negatively impact economic growth and food security in
Indonesia and directly impact those living in poverty.
For this reason, developing countries refused to
include “no conversion” in the approach to forestry
and REDD at the UN Climate Change conference in
Cancun in December 2010.
industry is expected to continue its rapid growth in
the medium-term; however, its competitiveness will
be negatively impacted by the anti-palm oil agenda.
The global market for palm oil has experienced rapid
growth in recent decades with current production of
palm oil estimated at over 45 million tonnes.
Indonesia is one of the world’s largest producers and
exporters of palm oil, producing over 18 million
tonnes of palm oil, annually.
Agriculture and Regional Poverty
Although only contributing around 14 percent to
GDP, agriculture provides employment for over 41
percent of the Indonesian population and provides
around two-thirds of rural household income. The
palm oil industry is a significant contributor to rural
income in Indonesia. In 2008, over 41 percent of oil
palm plantations were owned by small land holders,
producing 6.6 million tonnes of palm oil.
With over half of Indonesia’s population lives in rural
areas—of which over 20 percent live below the poverty
line—the palm oil industry provides an incomparable
means of poverty alleviation. Limiting the conversion
of forest to agriculture or palm denies considerable
prospective economic benefits and improvements in
living standards to the rural population, condemning
them to declining standards of subsistence.
Future Industry Growth
Restrictions on the conversion of forest area
will negatively impact economic growth and food
security in Indonesia and directly impact those
living in poverty.
Economic Benefits of Palm Oil
The palm oil industry has the potential to generate
significant economic and social development in
Indonesia. Palm oil is Indonesia’s second most successful agricultural product, after rice paddy, and
largest agricultural export. It provides a means of
income and economic development to a large number
Indonesia’s rural poor. The Indonesian palm oil
4 •The Economic Benefit of Palm Oil to Indonesia
With global demand for palm oil expected to grow
further into the future, palm oil offers the most promising economic prospects for Indonesia. World production of palm oil is expected to increase by 32
percent to almost 60 million tonnes by 2020.
Restrictions on the conversion of forests to oil palm
plantations Indonesia would reduce the availability of
fertile land and impede expansion of the industry.
Government policies should aim to improve productivity and not implement anti-growth NGO policies.
Indonesia is one of the world’s largest producers of
palm oil and the industry has been the economy’s most
valuable agricultural export sector for the past decade.
The palm oil industry is a significant contributor to
production in Indonesia. In 2008, Indonesia produced
over 18 million tonnes of palm oil. The industry also
contributes to regional development as a significant
source of poverty alleviation through farm cultivation
and downstream processing. Palm oil production provides a reliable form of income for a large number of
Indonesia’s rural poor, with one source suggesting
that employment generated from palm oil production
in Indonesia could potentially reach over 6 million
lives and take them out of poverty. Over 6.6 million
tonnes of palm oil is produced by smallholders representing over 41 percent of total palm oil plantations.
In 2006, it was found that around 1.7 to 2 million people
worked in the palm oil industry.
The Indonesian palm oil industry has recently come
under fire from a number of NGOs who have campaigned against the industry and its perceived contribution to deforestation, carbon emissions, and
biodiversity loss. As a result, there have been wide
spread complaints that palm oil is not sustainable and
proposals to have all future forest land conversion
halted or restricted.
assessment of the economic benefits of the palm oil
industry to inform policy makers and officials. It examines recent industry performance and considers the
prospects for future growth. Key components include:
• Current trends and future projections for global oil
demand;
• The contribution of agriculture and palm oil to the
Indonesian economy;
• Palm oil’s contribution to rural development; and
• Key challenges and opportunities for the Indonesian
palm oil industry.
This report has been prepared as an independent
assessment of the economic benefits of the palm
oil industry to inform policy makers and officials.
In May 2010, the Indonesian Government foreshadowed a two-year moratorium on new concessions to
clear natural forests and peatland under a deal signed
with the Norwegian Government, aimed at reducing
greenhouse gases. In return for the agreement,
Norway has agreed to invest $1 billion in forest
conservation projects in Indonesia. A year prior, the
Indonesian government had announced it would double palm oil production to 40 million tonnes by 2020.
The successful growth of the Indonesian palm oil
industry will be impacted greatly by any restrictions
on land conversion as well as negative campaigns
targeting the industry. The achievement of the
Indonesian government’s target of doubling oil palm
production will also be significantly impacted by the
moratorium, as some level of land conversion is
required for economic development.
This report has been prepared as an independent
The Economic Benefit of Palm Oil to Indonesia • 5
I. INTRODUCTION
I. Introduction
II. GLOBAL ECONOMIC IMPORTANCE
OF PALM OIL
II. Global Economic Importance of Palm Oil
Palm oil is a vegetable oil derived from the fruit of the
palm tree, it is used for both food and non-food consumption. Total global production of palm oil is estimated at over 45 million tonnes, with Indonesia and
Malaysia as the major world producers and exporters.
Major importers include India, China and the
European Union.
The palm oil industry has experienced rapid growth in
recent decades, and has become a significant contributor to the world market for vegetable oils. Demand
for palm oil has further increased in recent years as
many developed economies are shifting away from the
use of trans-fats, to healthier alternatives. Palm oil is
often used as a substitute for trans-fat as it is one of the
few highly saturated vegetable fats that are semi-solid
at room temperature, and is relatively low cost.
World trade in palm oil has increased significantly due
to increased global demand. However, there has also
been public concern surrounding the impact of palm
Fig. 2.1
Mexico
oil on deforestation, carbon emissions and biodiversity loss. High returns have encouraged investment in
the Indonesian palm oil industry, and the resulting
industry growth has contributed significantly to rural
economic development and poverty alleviation.
However, despite the expected increase in future
demand, land use restrictions (such as the recent two
year moratorium on new concessions to clear natural
forests and peatland in Indonesia) may constrain
industry development, as some level of land conversion is needed for industry growth.
Trends in the Global Production
and Trade of Palm Oil
Originating in Africa, the oil palm was introduced into
Malaysia and Indonesia in the colonial period. Current
cultivation is concentrated in the tropical areas of the
Americas, Africa and Southeast Asia, particularly
Indonesia and Malaysia—where the climatic growing
conditions are ideally suited for palm oil trees. Other key
palm oil producing countries include Nigeria, Thailand,
Columbia, Ecuador and other African economies.
Oil Palm Cultivation in 43 Oil Palm Producing Countries in 2006
China
Honduras
Ivory Coast
Ghana
Togo
Senegal & Gambia
Benin
Venezuela
Guinea Bissau
Suriname
Guinea
Sierra Leone
Liberia
Sao Tome &
Principe
Equatorial Guinea
Brazil
Gabon
Congo
Angola
Colombia
Dominican
Republic
Guatemala
Nicaragua
Costa Rica
Panama
Ecuador
Peru
Nigeria
Thailand
Cameroon
Central African Republic
Democratic Republic of Congo
Burundi
Somalia
Indonesia
Soloman
Islands
> 1 million ha
100,000 to 1 million ha
10,000 to 100,000 ha
< 10,000 ha
Source: Koh and Wilcove 2008
6 • The Economic Benefit of Palm Oil to Indonesia
Papua New
Guinea
Tanzania
Madagascar
Paraguay
Philippines
Malaysia
Fig. 2.2
World Palm Oil Production 1989-2007
45
tonnes (millions)
40
35
30
25
20
15
10
5
0
1989
1991
World
1993
Malaysia
1995
1997
Indonesia
1999
Other
2001
2003
Africa
2005
2007
South East Asia (other)
Note: Rest of the World contains all other countries except as individual listed, including other South East Asian countries
Source: FAO 2010.
Total world production of palm oil has increased
almost threefold over the past 3 decades to 20091. In
2009/10, total palm oil production was estimated at
45.1 million tonnes,2 with Indonesia and Malaysia
accounting for more than 85 percent of the world total.
Indonesia and Malaysia each produced over 18 million
tonnes of palm oil.
Total trade in palm oil and palm kernel oil is over 35
million tonnes, imported and exported. Major
exporters of palm oil include Indonesia and Malaysia
who exported 15.7 and 15.1 million tonnes, respectively. Key importing economies included India, China
and the European Union, who imported 6.7 million,
6.3 million and 4.6 million tonnes, respectively.3
Trends in the Global Consumption of Palm Oil
Approximately 80 percent of global palm oil production is used for food purposes including as cooking oil,
in margarines, noodles, baked goods etc. In addition,
palm oil is used as an ingredient in non edible prod-
1
2
3
4
High returns have encouraged investment in the
Indonesian palm oil industry, and the resulting
industry growth has contributed significantly to
rural economic development and poverty alleviation.
ucts including in the production of bio-fuel, soaps,
detergents and surfactants, cosmetics, pharmaceuticals and a wide variety of other household and industrial products. In 2009, the world consumed
approximately 6.5 kilograms of palm oil per capita,
annually.4 Palm oil and palm kernel oil uses, in both
food and non-food products, have been growing significantly. By 2020, global consumption of palm oil is
expected to grow to almost 60 million tonnes.
World demand for palm oil is also increasing, and likely to further increase, as developing economies move
away from manufactured trans-fats to healthier alter-
FAO (2010)
FARPI (2010)
FAO (2010)
FARPI (2010)
The Economic Benefit of Palm Oil to Indonesia • 7
natives. Trans-fats are often used in the place of natural
solid fats and liquid oils in the production of commercial food, particularly fast food and the snack and
baked-good industries. Artificial and synthetic transfats are created by the processed food industry from
partially hydrogenating unsaturated plant fats.
Recently, developed economies have recognised the
health risks of trans-fats, and have begun to limiting
their use. Countries such as Demark, Switzerland and
some U.S counties have banned the use of trans-fats in
restaurants and fast food chains. Other countries such
as the United Kingdom, Canada and Brazil have imlemented policies aimed at reducing the use of transfats, including the requirement for trans-fats to be
listed on food labels. In substitute for trans-fats, the
demand for palm oil has increased. In addition to
being a source of healthy unsaturated fats, palm oil is
odourless and tasteless and does not require hydrogenation to achieve a solid state. These characteristics
make palm oil ideal for margarine, baked goods and
packaged goods, making it a strong competitor with
vegetable oils made from soybeans and rapeseed that
require hydrogenation to achieve a solid state. In addition, palm oil is tolerant to high heat making it useful
in the fried food and fast food industries.
Palm oil’s increasing contribution to the bio-fuels industry is also stimulating further demand. However, this
demand is relatively low as compared with other
Investment in bio-diesel processing capacity
is increasing; the Indonesian and Malaysian
governments have introduced policies to develop
a bio-diesel industry and targets of allocating
6 million tonnes of palm oil to the
industry each year.
5
6
7
8
9
10
11
12
Sheil et al (2009)
Sheil et al (2009)
OECD-FAO (2009)
Thoenes (2006)
Sheil et al (2009)
Thoenes (2006)
Neste Oil (2007)
Darby Sime
8 • The Economic Benefit of Palm Oil to Indonesia
sources as palm oil currently accounts for less than 5
percent of the world’s bio-diesel production5.
Approximately 95 percent of the world’s energy consumption is sourced from fossil fuels; by 2030 energy
consumption is expected to increase by a further 50
percent.6 Many economies are setting targets to convert
reliance on fossil fuels to greater use of renewable energy
in efforts to reduce GHG emissions. One such renewable energy source that has grown significantly over the
last decade is bio-fuel. Palm oil is widely used as a feedstock in bio-diesel production. Although dependent on
government policies, the increased use of bio-fuels is
expected to facilitate further demand growth for palm
oil. The OECD is expecting the global usage of vegetable
oils in bio-diesel production to more than double
between 2006-08 and 2018.7 Palm oil is the most cost
competitive vegetable oil for producing bio-diesel.8
Many economies are currently adopting policies that
encourage the use of bio-fuel. If such blending mandates
are enforced an extra 4 million hectares of oil palm
would be needed to meet European Union requirements alone. A further one million hectares may be
needed to satisfy China’s requirements, making bio-fuel
production even more attractive.9
Investment in bio-diesel processing capacity is increasing; the Indonesian and Malaysian governments have
introduced policies to develop a bio-diesel industry and
targets of allocating 6 million tonnes of palm oil to the
industry each year.10 An oil refiner in Finland (Neste
Oil) has built the world’s largest bio-diesel plant in
Singapore11 and another major producer (Sime Darby
Berhad) has an annual processing capacity of 200,000
tonnes of biodiesel in the Netherlands.12 However, in
some cases, palm oils penetration of the bio-fuel market has been distorted by government assistance measures. For example, the use of palm oil has been stymied
by European Union protectionist policies against the
importation of palm oil for use as a biofuel. In 2008,
the European Parliament issued the Renewable Energy
Directive restricted the use of palm oil based bio-fuels,
due to environmental and social concerns. This will
have direct implications for the global demand for
Fig. 2.3
Type of Vegetable Oil
Soybean Oil
World Consumption of Vegetable Oils, 1980-2009
1980
Quantity
%
1990
Quantity
%
2000
Quantity
%
2009
Quantity
%
13.4
33.7
16.1
26.5
25.6
27.7
35.9
27.0
Palm Oil
4.5
11.3
11.0
18.1
21.9
23.7
45.1
34.0
Rapeseed Oil
3.5
8.8
8.2
13.5
14.5
15.7
21.5
16.2
Sunflower Oil
5.0
12.6
7.9
12.9
9.7
10.5
13.0
9.8
Palm Kernel Oil
0.6
1.5
1.5
2.5
2.7
2.9
5.2
3.9
Other Vegetable Oils
12.8
32.1
16.1
26.5
18.1
19.6
12.0
9.0
Total Vegetable Oils
39.8
60.8
92.5
132.8
Note: Quantity in millions of tonnes
Source: Oil World (2010), in Hai Teoh (2010)
palm oil as the European Union is the world’s largest
consumer of bio-fuels.
Trends in the Global Consumption
of Vegetable Oils
Over the past 3 decades, there has been a substantial
growth in the global consumption of vegetable oil.
Between 1980 and 2008 consumption increased more
than threefold from 40 million tonnes to over 130 million tonnes. In addition, there has been a significant
shift in the relative market share of different vegetable
oils. In 1980, the market share for palm oil was 11
percent; the main vegetable oil on world markets was
soybean, accounting for approximately a third of total
consumption. The market share of soybean has since
fallen, with palm oil becoming the major consumed
vegetable oil. In 30 years, palm oil consumption has
increased tenfold from 4.5 to 45 million tonnes
(including growth of 100 percent in the last decade)
and now comprises 34 percent of the world market. In
2009, despite consumption of soybean oil increasing
by 22.5 million tonnes, its market share had fallen to
27 percent. Rapeseed and sunflower oil’s market
shares were 16 percent and 10 percent, respectively.
The Economic Benefit of Palm Oil to Indonesia • 9
III. ECONOMIC IMPORTANCE OF PALM OIL
TO INDONESIA
III. Economic Importance of Palm Oil
to Indonesia
Indonesia’s GDP was estimated at $USD 510.77 billion
in 2008, classifying it as a lower middle income country. Over the past decade, GDP growth has averaged
almost 5 percent (6.0 percent in 2008) and population
growth has averaged 1.2 percent. GDP per capita has
also grown steadily. Indonesia’s population is expected
to continue to grow at an annual growth rate of 0.57
percent to over 271 million by 2030.13
The structural composition of the Indonesian economy
has changed significantly in the past four decades. As
with most economies in the region, it has shifted from
a primarily agrarian economy towards the industry and
services sectors. Nowadays, Indonesian production is
largely dominated by the industrial sector, contributing
just over 48 percent to total economic activity, including the oil and gas which contribute to over 10 percent
of GDP.14 The services sector and agriculture sector
contribute 38 percent and 14 percent, respectively.15
Agriculture’s Contribution to the
Indonesian Economy
Nowadays, Indonesian production is largely
dominated by the industrial sector, contributing
just over 48 percent to total economic activity,
including the oil and gas which contribute to
over 10 percent of GDP.
Fig. 3.1
Indonesia’s major agricultural products include rice
paddy, palm oil, chicken meat, coconuts and rubber,
with major exports including Indonesia’s palm oil,
rubber, palm kernel oil, cocoa and coffee. The contribution of agriculture to GDP has steady decreased
over the past 20 years. In 2008, the agriculture sector
contributed 14.4 percent of GDP (as compared with
around 22.5 percent in 1988 and 18.1 percent in 1998).
Structure of the Indonesian Economy, 1960 to 2005
100
90
80
70
60
50
40
30
20
10
0
1960
1965
1970
1975
Services
Source: World Bank (2010)
13 UN Data (2010)
14 Statistics Indonesia (2010)b
15 OECD (2010)
10 • The Economic Benefit of Palm Oil to Indonesia
1980
Industry
1985
1990
1995
Agriculture
2000
2005
Fig. 3.2
Indonesian Commodity Share of Agricultural Production, 2009
Rice Paddy
Palm Oil
Chicken Meat
Coconuts
Natural Rubber
Other
Source: FAO (2010)b
Palm Oil’s Contribution to the Indonesian Economy
Palm oil is Indonesia’s second largest agricultural
product; in 2008, Indonesia produced over 18 million
tonnes of palm oil. For the last decade, palm oil has
been Indonesia’s most significant agricultural export.
In 2008, Indonesia exported over $14.5 billion in palm
oil related products.16 The Indonesian palm oil industry has experienced significant growth in recent years
with approximately 1.3 million ha of new area dedicated to palm oil plantations since 2005, reaching almost
5 million ha in 2007 (representing 10.3 percent of the
48.1 million ha of agricultural land).17 This substantial
expansion is due to higher returns driven by stronger
demand. The majority of Indonesia’s palm crop is
located in Sumatra, with over 75 percent of total
mature palm area and 80 percent of total palm oil production.18 Key Indonesian production provinces
include Riau, Sumatera Utara, Sumatera Selatan,
Jambi and Sumatera Barat.
small shareholders and the remaining 10 percent by
Government plantations. Private plantations represent the largest producers of palm oil in Indonesia,
producing over 9.4 million tonnes of palm oil valued in
2008. In the same year smallholder plantations produced 6.7 million tonnes of palm oil and Government
plantations produced 2.2 million tonnes of palm oil.
Palm Oil and Rural Development in Indonesia
Poverty in Indonesia is largely a rural occurrence. In
2009, of 32.5 million Indonesians living below the
national poverty line, 20.6 million were located in rural
For the last decade, palm oil has been Indonesia’s
most significant agricultural export. In 2008,
Indonesia exported over $14.5 billion in palm oil
In 2008, approximately 49 percent of palm oil plantations were owned by private plantations, 41 percent by
related products.
16 Indonesian Palm Oil Commission (2008), GAPKI(2009), Statistics vary amongst sources, unofficial FAO (2010) statistics estimate
production in 2008 at over 16.9 million tonnes.
17 As measured by the FAO (2010)
18 USDA (2009)
The Economic Benefit of Palm Oil to Indonesia • 11
Fig. 3.3
Key Palm Oil Areas in Malaysia and Indonesia
BRUNEI
Nanggroe
Aceh
Darussalam
Serawak
MALAYSIA
Riau
West
Sumatra
SINGAPORE
Sabah
West
Kalimantan
Jambi
West
Papua
Central
Kalimantan
South
Kalimantan
Papua
INDONESIA
Bali
TIMOR LESTE
AUSTRALIA
Source: Sheil, D. et al (2009), pg 4
areas. The percentage of poor in rural areas of Indonesia
vastly outweighs that of their urban counterparts, with
over 17.3 percent of the rural population below the poverty line, as compared with 10.7 percent in urban areas.19
This overall poverty rate doesn’t account for the millions
who live just above the poverty line.20 The International
Fund for Agricultural Development (IFAD) found that
the poorest people in rural areas tend to be farm labourers working on other peoples land, and smallholders on
small plots of land less than 0.5 hectares.
Over half of Indonesia’s population is located in rural
areas. In 2002, agriculture represented two thirds of
rural employment and contributed to almost half of
Significant growth in the palm oil industry, has
led to palm oil becoming component of economic
activity in regional economies.
19
20
21
22
23
Statistics Indonesia (2010)
IFAD, accessed September 2010
ADB (2006), pg 3
Sumatro and Suryahadi (2004) in ADB(2006)
USDA (2009)
12 • The Economic Benefit of Palm Oil to Indonesia
rural household income (wages and farming
income)21. A 2004 study showed that agricultural GDP
growth in Indonesia is beneficial in reducing poverty,
particularly in rural areas. Specifically, annual growth
of 1 percent was found to reduce total poverty by 1.9
percentage points (urban poverty by 1.1 percentage
points and rural poverty by 2.9 percentage points)22.
World growth (2009) noted that over the past decade,
industry expansion—specifically palm oil—has been a
significant source of poverty alleviation through farm
cultivation and downstream processing.
Significant growth in the palm oil industry, has led to
palm oil becoming component of economic activity in
regional economies. In certain regions, palm oil is the
dominant estate crop and major contributor to economic development. In the past decade, the palm oil
plantation areas of Kalimantan and Suliwesi have experienced strong development, averaging 13 percent and 8
percent annual growth rates, respectively.23 The plantation and harvesting of oil palm is labour intensive, as
such, the industry contributes a significant portion of
Fig. 3.4
Production, Land Area and Yield by Plantation Type, 2002 -2008
25
4
hectares/tonnes (millions)
20
3
15
yield
2
10
1
5
0
2002
0
2003
2004
2005
2006
2007
2008
Production (Other)
Mature Land Area (Other)
Yield (Other)
Production (Smallholders)
Mature Land Area (Smallholders)
Yield (Smallholders)
Note: Yield is calculated as total production to mature palm oil plantation area. Other is total production less smallholder production.
Source: World Growth calculations from Indonesian Palm Oil Commission statistics
employment in many regional areas. Goenadi (2008)
estimates that employment generated from palm oil
production in Indonesia could potentially reach over 6
million lives and take them out of poverty.24 Additional
benefits to palm oil workers have included secure
incomes, access to healthcare and education.25 Palm oil
production provides many of the rural poor with a sustainable income; with key palm oil developments such
as Sumatera and Riau also having a significant percentage of rural poor. Annex 1 outlines palm oil production
and poverty statistics for key Indonesian provinces.
The Contribution of Palm Oil to
Local Economies and Small Land Holders
Palm oil provides employment for many small landholders, with over 6.7 million tonnes of palm oil produced by smallholders in 2008. In 2006, it was found
that around 1.7 to 2 million people worked in the palm
oil industry.26 In 2008, the Indonesian palm oil commission found that over 41 percent of total palm oil
24
25
26
27
Goenadi (2008) estimates that employment
generated from palm oil production in Indonesia
could potentially reach over 6 million lives and
take them out of poverty.
plantations were owned by smallholders, with a further 49 percent owned by private plantations—the
remaining 10 percent is owned by government. The
palm oil industry makes a substantial contribution to
rural incomes, particularly small land holders. In 1997,
the average net income of oil palm smallholders was
seven times that of farmers involved in subsistence
production of food crops.27
The importance of the palm oil industry to rural development has been recognised by both the Indonesian
Government and the private sector. For example, the
Goenadi (2008), pg 3.
Sheil, D. et al (2009)
Zen et al (2006) and Sheil, D. et al (2009)
Hardter et al (1997), pg 99
The Economic Benefit of Palm Oil to Indonesia • 13
Indonesian Government has previously implemented
a series of rural and socio-economic improvement programs directed at small oil palm landholders. Until
2001, the use of palm oil ‘nucleus estates’ was suggested
to raise the income of over 500,000 farmers. Zen et. al
(2006) have also found initiatives by commercial palm
oil enterprises aimed at improving the socio-economic
status of many rural populations. For example, in
1996, a Sumatran company distributed three cows to
the families of each of its 500 employees to graze on oil
palm waste and kernel cake. By 2003, the number of
cattle had doubled, area harvested per worker had
increased from 10 to 15 hectares, and worker incomes
had been proportionately increased. Other commercial
initiatives have included community palm oil areas
and nucleus estates.
Returns from Palm Oil Production
In terms of land-use, oil palm gives the highest yield
per unit area as compared with any other crop-based
oil seeds. The average oil yield from 1ha of oil palm is
4.09 tonnes, as compared with soybean, sunflower
and rapeseed which yields 0.37, 0.5 and 0.75 tonnes,
respectively.28 Modern high-yielding varieties of palm,
under ideal climate conditions and good management
In terms of land-use, oil palm gives the highest
yield per unit area as compared with any other
crop-based oil seeds.
are able to yield 5 tonnes of palm oil per hectare,
annually.29
Historically, smallholder plantations have been less
productive than other palm oil plantations. In 2008,
production per hectare for smallholders was estimated
at 3.04 tonnes/ha as compared with 3.7 tonnes/ha for
government plantations and private plantations.30
World Growth (2009) found that there is considerable
potential for small holders in Indonesia to expand output on existing acreages through the use of fertiliser
and new genetic stock.31
Goenadi (2008) suggests that, because of the growing
climate in Indonesia, palm oil yields may potentially be
as high as 6-7 tonnes per hectare. However, in 2008,
Indonesia was averaging between 3-4 tonnes of palm oil
per hectare.32 Increasing the yield of palm oil production gives Indonesia the potential to increase the production without requiring additional land conversion.
Land-use returns from oil palm are significant as compared with many other forms of land-use. In 2007, a
report prepared for the Stern Review estimated the
return from palm oil land-use as ranging from
$USD960/ha to $USD3340/ha. This was in comparison with smallholder rubber, rice fallow, cassava, and
one-off timber harvesting which yielded $USD72/ha,
$USD28/ha, $USD19/ha and $USD1099/ha, respectively. Specifically, land-use returns for palm oil were
estimated as including:
• $USD960/ha for low yield independent growers;
• $USD2340/ha for high yield independent growers;
• $USD2100/ha for supported growers; and
• $USD3340/ha for large scale growers.33
28
29
30
31
32
33
Sustainable Development Project (2010) and Oil World (2010)
FAO (2002)
Indonesian Palm Oil Commission (2008)
World Growth (2009), pgs 13 and 14.
Indonesian Palm Oil Commission (2008), pg 25.
Greig-Gran M (2008)
14 • The Economic Benefit of Palm Oil to Indonesia
to be advantageous for a lower risk of heart disease.35
Future Prospects for Global Palm Oil Demand
As well as total increased total consumption, per capita consumption of vegetable oils has been increasing
in some major developing economies due to strong
income growth. Palm oil has benefited from this
development due to its relatively high energy per
gram of food. In 2009-10 China and India accounted
for over 40 percent of the net imports in world trade.
Future economic growth in these countries will
increase the demand for imported vegetable oils.
Increased returns from a strong global demand for
vegetable oils are expected to encourage investment in
the palm oil industry leading to continued growth over
the medium term, with global consumption expected
to increase over 30 percent in the next decade.34 By
2020, global consumption and production of palm oil
is expected to increase to almost 60 million tonnes.
The health characteristics and cost competitiveness of
palm oil, coupled with its potential contribution to
renewable energy, is expected to contribute to a
growth of over 30 percent in the next decade. Growth
in the palm oil industry has been contributed to by the
production cost advantages in oil palm cultivation.
Oil palms are a highly productive tree crop in comparison to crop based oil seeds—oil yields are 5 to 9 times
higher than the yields achieved by soybean, rapeseed
and sunflower. There are cost advantages in oil palm
from lower land prices and lower energy inputs.
In the last few years, many developed economies
have moved towards reducing and banning
trans-fats, as a result many food manufacturers
have replaced trans-fats with palm oil.
Global Palm Oil Production and Opportunities
As developed economies shift away from trans-fats
towards healthier alternatives, the demand for palm oil
will also likely increase relative to its competitors. In the
last few years, many developed economies have moved
towards reducing and banning trans-fats, as a result
many food manufacturers have replaced trans-fats with
palm oil. In addition to being cost competitive, palm oil
is high in mono-unsaturated fats which are considered
Fig. 4.1
By 2020, FAPRI estimates that Indonesia will produce
almost 30 million tonnes of palm oil, including exports
of almost 23 million tonnes. This growth will be
achieved through increased yields and further land
conversion.
Malaysia appears to have limited opportunity for
Projections of World Palm Oil Supply and Utilization
2009/2010
(‘000 tonnes)
2019/2020
(‘000 tonnes)
% change
44,330
58,639
32%
Production
45,132
59,264
31%
Trade
30,760
41,649
35%
Consumption
Source: FAPRI 2010
34 OECD-FAO (2009)
35 Malaysian Palm Oil Council (2008)
36 FARPI (2010)
The Economic Benefit of Palm Oil to Indonesia • 15
IV. FUTURE PROSPECTS FOR PALM OIL
IV. Future Prospects for Palm Oil
Fig. 4.2
Projections of Palm Oil Supply and Utilization
45
tonnes (millions)
40
35
30
25
20
15
0
2010
2011
2012
2013
PRODUCTION
CONSUMPTION
TRADE
2014
World
2015
2016
Indonesia
2017
2018
2019
2020
Malaysia
Source: FAPRI 2010
expansion through land conversion due to land zoning
restrictions. Limited land availability is expected to
slow palm oil production growth, particularly in
Peninsular Malaysia and Sabah.
Yield gains on existing cultivation areas are another
way to expand output. But there are signs that
improvements in plantation yields are slowing in
Indonesia and Malaysia.37 The cost of establishing
new plantations is also increasing because of environmental requirements. If these trends continue and
land use constraints become more restrictive there
will be opportunities for other suppliers. FAPRI predicts that Malaysian palm oil production will increase
by 26.5 percent, to 23.4 million tonnes by 2020,
slightly less than the predicted Indonesian production
of 28.5 million tonnes. The favourable outlook for
palm oil demand will encourage industry investment
in other countries including Nigeria and Thailand
who each produced over around 1.3 million tonnes, in
2008.38 Recent reports suggest Chinese companies
are negotiating for land in DR Congo and Zambia for
oil palm plantations.39 There are also reports of
37
38
39
40
Thoenes (2006)
FAO (2010)
Economist (2009)
Reuters (2010)
16 • The Economic Benefit of Palm Oil to Indonesia
investors looking at plantation growth in West Africa
and Malaysian companies are looking at expansion
opportunities in Brazil.40
Key Challenges and Opportunities for the
Indonesian Oil Palm Sector
Environmental Challenges
Increasing global palm oil production, particularly in
Malaysia and Indonesia has generated gained the
attention of some major NGOs, including Greenpeace,
WWF and Friends of the Earth. Initially, the major
opposition to palm oil was over deforestation with
more recent concerns surrounding the impact of oil
palm expansion on loss of biodiversity (including
orang-utan habitat) and CO2 emissions. The central
claim of the environmental campaign against the palm
oil industry is that deforestation, especially the conversion of forest land to palm oil, is a major contributor to
CO2 emissions. Palm cultivation on peat land and
indirect land use changes are often cited as the major
threat to climate change. However, there is consider-
able uncertainty and debate about the data and models used to support these claims.41 The primary causes
of deforestation include urban growth, subsistence
farming, housing and firewood collection.42
There is considerable debate as to the extent of deforestation in Indonesia, largely due to varying interpretations of the term and insufficient information. In
the 10 years to 2010, the FAO estimated that forest
area in Indonesia has decreased 5 percent, from 99.4
million hectares to 94.4 million hectares.43 This rate
of decrease has lessened from the previous decade,
where forest area decreased over 1.75 percent per year
from 118.5 million hectares, to 99.4 million hectares.
In the past decade, although the year-on-year percentage change in forest area has been increasing (due
to a relatively smaller forest base each year) the
decrease in forest area has been less in absolute terms.
Fig. 4.3
Figure 4.3 depicts total forest areas and the annual
rate of change in forest area in Indonesia from 1990.
Specific data on the contribution of palm oil to deforestation is limited, and estimates vary significantly.
Some statistics of the contribution of palm oil to defor-
Malaysia appears to have limited opportunity
for expansion due to land zoning restrictions.
Limited land availability is expected to slow palm
oil production growth, particularly in Peninsular
Malaysia and Sabah.
Indonesian Forest Area, 1990 to 2010
140
hectares (millions)
120
100
80
60
40
20
0
1990
1992
Forest Area
1994
1996
1998
2000
Annual Change (level)
2002
2004
2006
2008
2010
Annual Change (precentage)
Note: 2009 figure is based on the half way point between the 2008 and 2010 figure.
Source: FAO (2010)
41 World Growth (2010) states that many of these claims are made with little or no substantiation and rely almost solely on absolute statements
and unfounded appeals to the emotions of consumers in developed nations. There is limited data on the relative size of Indonesian forest and
oil palm area. There is no standard definition for what constitutes deforested land in Indonesia and estimates of the rates of deforestation are
often based on very weak science, consequently available statistics can differ greatly. Current calculations of carbon sinks and deforestation
are generally based on satellite imaging which takes into account broad-area samples only and estimates are often over stated and out-of-date.
42 FAO (2010)
43 FAO (2010)c
The Economic Benefit of Palm Oil to Indonesia • 17
Fig. 4.4
Land Use in Indonesia, 1990 to 2005
Oil palm fruit*
1990
(‘000 ha)
1995
(‘000 ha)
2000
(‘000 ha)
2005
(‘000 ha)
673
1190
2,014
3,690
517
824
1,676
change
Agricultural Land
45,083
change
Forestry Land
118,545
change
42,187
44,777
48,446
-2,896
2,590
3,669
108,977
99,409
97,857
-9,568
-9,568
-1,552
*Area harvested, this figure differs from Indonesian Palm Oil Commission figures who measure total area of palm oil plantations at 5.95 million ha and 7.02 million
hectares in 2005 and 2008, respectively.
Source: FA0 (2010)
estation assume that all growth in oil palm area is
attributed to the conversion of forestland into palm
plantations, calculating the industry’s contribution to
deforestation as the change in oil palm area to the level
of deforestation, over a given period. This gives a misleading image of palm oil’s contribution to deforestation, as some expansion would be on degraded land.44
In 2008, the relative contribution of global CO2 emissions from deforestation and forest degradation was
estimated at approximately 12 percent.45 In 2006,
Indonesia emitted 1.5 metric tonnes of CO2 per capita, less than the average of both East Asia and the
pacific and other lower middle income economies,
and significantly less than the United Kingdom and
the United States who emitted 9.3 metric tonnes and
19.3 metric tonnes, respectively.46 Despite the campaign against the palm oil industry, the production of
palm oil is more sustainable than any other crop
based vegetable oils. Palm oil production consumes
considerably less energy, uses less land and generates
more oil per hectare than any other oil seeds, has a
comparatively smaller carbon footprint and is an
effective carbon sink.47 The impact of deforestation on
biodiversity loss, particularly the loss of orang-utan
habitat is also a commonly raised concern. The pressure on biodiversity stems from a variety of sources
including poverty, agricultural/forestry activity, institutions and technology. Habitat loss is not solely due
to the conversion of forest lands to oil palm plantations. Between 2000 and 2007, palm oil land use
increased by 2.9 million hectares in comparison to
other land uses which increased by 9.4 million
hectares. Orang-utan habitat is also preserved
through protected areas in Indonesia that have been
established and are subject to a range of different
laws. Over 23 percent of Indonesia is reserved for forest conservation, including 42 percent in Aceh and 40
percent in Kalimantan.48
Land Availability Constraints
The limited availability of land for conversion to oil
palm estates poses a significant challenge for the
growth of the Indonesian palm oil industry as some
land conversion to oil palm plantations will be
required for continued industry growth. A number of
NGOs have initiated a campaign against the palm oil
industry and the conversion of Indonesia’s rainforests
to oil palm plantations. As a consequence, the
44 Major Indonesian companies, including APP and APRIL, have made some efforts to improve the sustainability of their activities by agreeing
to sustainability actions, such as commitments to protect High Value Conservation Forest, etc.
45 G.R. van der Werf (2009)
46 World Bank (2010)
47 World Growth (2009)
48 World Growth (2010)
18 •The Economic Benefit of Palm Oil to Indonesia
Indonesian Government has introduced a series of
programs to tackle deforestation—the most significant
is the 2 year moratorium on forest conversion49 In
May 2010, the Indonesian government signed a deal
with the Norwegian Government, to impose a twoyear moratorium aimed at reducing greenhouse
gases; in return Norway will invest $1 billion in forest
conservation projects in Indonesia. In addition, the
government has also introduced a number of deforestation programs with the financial support of several developing economies. For example, the United
Nations’ REDD (Reducing Emissions from
Deforestation and Degradation) program contributed
over $US5.6 million to Indonesia between 2009 and
2011 in an attempt to reduce deforestation.50
The successful growth of the Indonesian palm oil
industry will be impacted greatly by restrictions on
the conversion of land to oil palm plantations, as some
level of land conversion is needed for economic development.
The Conversion of Degraded Land
In May 2010, in order to reduce deforestation, the
Indonesian Government announced a policy to develop oil plantations on degraded land instead of further
converting forest or peatland. Indonesian officials
suggested that the palm oil industry could still expand
through the acquisition of six million hectares of
degraded land.51 The current oil palm area is 7 million
hectares. However, the success of the use of degraded
land depends on the extent of degradation.
There is currently no single formal definition of degraded land; however, land degradation generally indicates
a decline in the productive capacity of the land.
Estimates of area affected by degradation vary widely.
The FAO estimates that degraded land in Indonesia is
largely water and wind erosion caused by deforestation
and chemical deterioration. Approximately 38 percent
(71 million hectares) of Indonesian land is affected by
degradation (including 32 percent of land which is
severely degraded and 6 percent which is very severely
degraded); of this, 30 percent is human induced degradation due to agricultural activities, representing 11 percent of total land.52
Government restrictions on the conversion of forestlands to oil palm plantations will increase the need for
Indonesia to utilise other forms of land, including
degraded land. However, the success of palm oil production on degraded land depends largely on the
quality of available land. Currently, there is a lack of
common methodology, and accurate and timely spatial data, for identifying acceptable degradation areas
for sustainable oil palm plantation area.53 As part of
The limited availability of land for conversion to
oil palm estates poses a significant challenge for
the growth of the Indonesian palm oil industry as
some land conversion to oil palm plantations will
be required for continued industry growth.
the 2010 agreement between Indonesia and Norway,
the Indonesian government has agreed to establish a
degraded land database, providing the necessarily
information to identify areas of land acceptable for
the establishment of economic activity, including oil
palm plantations.54
Land Rights and Degradation
The use of degraded land for oil palm plantations is
dependent on the severity of degradation and the quality of land available. Land degradation occurs due to
land clearance, overgrazing, poor farming practices,
extensive agricultural activities, poor land management and inadequate conservation. In order to reduce
the severity of land degradation, land users need
incentives to manage and conserve land appropriately.
49
50
51
52
Government of Indonesia and Government of Norway (2010)
UN-REDD (2010)
Reuters (2010)c
FAO/AGL (2010), in the 1980’s the Global Assessment of Human Induced Soil Degradation (GALSOD) estimated 16.53 percent of land
area (31.4 million hectares) in Indonesia was affected by degradation.
53 World Resources Institute (2010)
The Economic Benefit of Palm Oil to Indonesia • 19
Fig. 4.5
Brazil
Canada
China
EU
National Bio-Fuel and Bio-Diesel Targets
Target
Status
Policy Initiatives
2% in 2008, 5% by 2013
Implemented
Tax incentive, mandate
2% by 2010
Indicative
None
15% bio-fuels by 2020
No concrete policy
Tax support proposed
Implemented
Subsidies, tax incentives
5.75% by 2010, 10% by 2020
India
Indonesia
Preparing legislation
2 to 5% by 2010
Proposed
Japan
5% in 2009
Preparing legislation
Korea
5%
Implemented
Malaysia
5%
Proposed
Philippines
Thailand
USA
Mandate
1% in 2007, 2% by 2009
10% by 2012
Implemented
Tax waver, future mandate
28.4 billion litres of bio-fuel by 2012
Implemented
Tax credits, state mandates
Note: Unless specified in the table, figures refer to the percentage of bio-diesel mix e.g. 5% = 5% of bio-diesel mix.
Source: Sheil et al (2009)
Land-use in Indonesia is generally established under
temporary rights for cultivation, clearing etc.55 Since
decentralisation, rights for land cultivation and clearing are issued at various levels of government. The
decentralisation of authority over forest resource
management has resulted in confusion and a lack of
accountability for land management. Djogo and Syaf
(2003) suggest that decentralization of authority to
manage forests, coupled with laws retaining the
responsibility of conservation and rehabilitation of
forests to central government has left many district
government officials ambivalent toward forest rehabilitation and conservation. There are also conflicts of
authority between institutions such as the National
Park Agency, the National Land Agency and the
provincial and district level forest services. Conflicts
between spatial planning maps developed by provincial and district governments, in some instances, have
resulted in unauthorized land conversions endorsed
by district governments without the approval of
provincial or central governments.56 Limited or inse-
54
55
56
57
Government of Indonesia and Government of Norway (2010)
Colchester et al (2006)
Djogo and Syaf (2003)
Hatcher (2009)
20 • The Economic Benefit of Palm Oil to Indonesia
cure land tenure is a key driver of land use changes
leading to deforestation and forest degradation.57
Tenants without secured land tenure have little incentive to maintain and protect their land as compared
with those with secure tenure. The strengthening of
land tenure and use rights is needed in order to provide incentive for land users to invest in land improvement. The incentive for land users to maintain and
rehabilitate land—such that the severity of degradation is reduced and land is rehabilitated—requires
effective, secure and transparent land rights and
accountability processes.
Closing the Productivity Gap
A significant challenge for the palm oil industry is the
large productivity gap between actual and achievable
yields of palm oil plantations. In Indonesia, palm oil
yields averaged 3-4 tonnes/ha, however, various estimates of potential yields are up to 8.6 tonnes/ha.58
Almost year long sunshine, abundant rainfall, rich
volcanic-derived soils and familiarity with the production of palm oil give Indonesia an advantage in the
production of agricultural products and palm oil.59
Goenadi (2008) suggests that these resources coupled
with new palm oil breeds with superior characteristics
and the current planting materials available, the
genetic potential of annual production is around 6-7
tonnes of palm oil per hectare. However, in reality the
average attainable yield only reaches around half of
this. In 2008, the Indonesian palm oil commission
measured palm oil yield as averaging between 3-4
tonnes per hectare. There needs to be substantial
effort in order to reduce this gap, Goenadi suggests
that such an effort would include step-by-step land
preparation, routine field management and adaption
of new technologies. Improvement in productivity,
particularly among smallholders, provides the greatest challenge. Variations in the yields of smallholder
plantations are also significant, likely due to difference in farming practises and inputs than the genetic
potential of plants.60 Improving the productivity of
palm oil producers improves the profitability of the
sector without significant increases in land use or
costs of production. An increase of 20 percent in production could produce an additional 3.7 million
tonnes of palm oil in Indonesia, equivalent to current
production from around 1.07 million hectares.61
Other key challenges for the productivity of the
Indonesian palm oil sector, particularly in Kalimantan,
include low soil fertility, a periodic dry season and
potential land conflict.62
greater use of renewable energy, including bio-fuel, in
efforts to reduce GHG emissions increasing global
demand for alternative fuel options. Increased
demand coupled with Indonesia’s abundance of labour
and status as a global oil and petroleum producer,
places Indonesia in a relatively good position for the
production of bio-diesel. The Indonesian government
has already made a firm commitment to the development of bio-fuel, including the development an integrated strategy for implementation of a bio-fuel
program64 For example, countries including the
European Union, China, the USA, etc, have set fuel
Although palm oil currently accounts for less than
5 percent of the world’s bio-diesel production,
demand is likely to increase as economies adopt
policies that encourage the use of bio-fuel.
blending targets for bio-diesel ranging from 2 percent
in the Philippines to 10 percent in the European
Union, by 2020.
Indonesian Bio-diesel Industry
Although palm oil currently accounts for less than 5
percent of the world’s bio-diesel production, demand
is likely to increase as economies adopt policies that
encourage the use of bio-fuel.63 Despite a relatively
low market share, palm oil is often used as feedstock
in bio-diesel production, and as feedstock represents
the major cost of production, a bio-diesel industry is a
viable option for Indonesia. Many economies are setting targets to convert reliance on fossil fuels to
58
59
60
61
62
63
64
Henson (1990)
Goenadi (2008), pg 2
Hai Teoh (2010)
Calculated from Indonesian Palm Oil Commission data
Perba et al (2006)
Sheil et al (2009)
Bio-fuel Indonesia (2010)
The Economic Benefit of Palm Oil to Indonesia • 21
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24 • The Economic Benefit of Palm Oil to Indonesia
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The Economic Benefit of Palm Oil to Indonesia • 25
Annex: Palm Oil Production and Poverty by Province
The following table outlines palm oil production statistics for Indonesia’s top five palm oil producing provinces
(Riau, Sumatera Utara, Sumatera Selatan, Jambi and Sumatera Barat) and five poorest palm oil producing
provinces (Irian Jaya Barat, Sulawesi Tenggara, Sulawesi Tengah, Lampung and Bengkulu).
ANNEX
Table 1
Name
Indonesian Palm Oil Production and Poverty by Province, 2007
GRDP
Pop*
(RP trillions) (millions)
% of
Poor
Severity
Index
Private
Small
Holder
Govern.
Total
Riau
210.0
4.45
12.9
0.67
2,131,450
2,054,854
335,245
4,521,549
Sumatera Utara
181.8
12.99
13.63
0.51
1,664,575
1,022,472
1,025,005
3,712,052
Sumatera Selatan
109.9
7.45
18.43
0.83
855,521
759,034
140,346
1,754,901
Jambi
32.1
3.09
7.81
0.32
434,899
709,242
133,531
1,277,672
Sumatera Barat
59.8
4.85
13.01
0.52
548,316
326,580
40,998
915,894
Irian Jaya Barat
10.4
0.76
48.84
7.29
15,915
25,366
32,087
73,368
Sulawesi Tenggara
18.0
2.23
25.84
1.52
0
0
10274
10274
Sulawesi Tengah
19.3
2.63
24.97
1.6
97,077
8,180
9,173
114,430
Lampung
49.1
7.60
23.7
1.12
149,262
162,590
36,376
348,228
Bengkulu
11.4
1.71
21.66
0.92
208,923
217,022
8,072
434,017
Indonesia
3,950
237.56
17.35
n.a.
9,263,089
6,358,388
2,174,897
17,796,374
Note: * As measured by the 2010 census
Source: Statistics Indonesia (2010) and Indonesian Palm Oil Commission (2008).
26 • The Economic Benefit of Palm Oil to Indonesia
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