President orders cooperatives to enter palm oil business chain

Jakarta (ANTARA) - President Prabowo Subianto instructed domestic cooperatives to actively engage in the palm oil industry's supply chain, spanning from plantation management and crude palm oil (CPO) processing to downstream derivative products.

The policy shift aims to dismantle private sector monopolies and establish a more equitable trade ecosystem for local farmers, according to Cooperatives Minister Ferry Juliantono.

"Previously, everything was private: the plantations were private, the CPO was private, and the derivative products were private," he stated during a press conference here on Thursday (July 2).

"Now, under the President's direction, cooperatives must be involved not only in the plantations but also in the production process, including the derivative products," the minister added.

According to Ferry, integrating cooperatives throughout the value chain is a strategic effort to strengthen the people's economy and secure higher value-added returns for independent oil palm farmers.

He pointed out that private conglomerates currently control the vast majority of the palm oil business from upstream cultivation to downstream manufacturing. This extreme consolidation has led to deep structural ironies within the domestic market.

"We have received complaints from our friends in the oil palm farmer cooperatives. They are queuing for cooking oil. It is ironic that people who own oil palms are queuing for cooking oil. We think this is an unfair model," Ferry remarked.

To rectify this imbalance, the government is repositioning cooperatives as industrial instruments capable of managing plasma plantations and manufacturing consumer-ready commodities like cooking oil.

As a concrete step, the Cooperatives Ministry has signed a memorandum of understanding with state-owned enterprise PT Agrinas Palma Nusantara to establish a cooperative-based oil palm plantation ecosystem.

Through this partnership, local cooperatives will manage Agrinas' plasma plantations while receiving institutional training, capacity-building programs, and management upgrades to meet corporate partnership standards.

In addition, Ferry announced that the ministry will inaugurate a flagship cooperative-based CPO mill in Musi Banyuasin, South Sumatra, around late July or early August 2026.

The mill, which spans 3,100 hectares and boasts a production capacity of 60 tons per hour, will serve as the primary blueprint for scaling palm oil cooperatives nationwide.

Ferry concluded that this cooperative-led ecosystem will eventually expand beyond palm oil to include other strategic agricultural commodities, such as corn, soybeans, and cassava, to foster broader grassroots economic contribution.

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Translator: Shofi Ayudiana, Yashinta Difa

Editor: Azis Kurmala

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