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Although we should strive towards sustainable living environment but how can lives be sustained if there is no economic means to sustain the livelihood and survival of the poor and in this case, the oil palm smallholders?

Push for biodiesel at this juncture is at the expense of the poor oil palm planters and smallholders when crude petroleum oil is cheap these days. It would be more rational to use the cheap crude petroleum oil as diesel for the benefits of the people and the country.  Instead, the Government chooses to “burn” good money from export levy collected from the CPO to subsidize the biodiesel produced by rich conglomerates, which is a poor choice of fuel due to its relatively costly price compared to petroleum diesel. Rather than capitalising on the USD foreign exchange income through the export of CPO and using the cheaper petroleum diesel, the Government chooses the opposite by foregoing the USD export revenue from CPO. Instead, the poor oil palm smallholders are forced to subsidize the expensive biodiesel produced by the rich biodiesel conglomerates.

Analysing the statistic from GAPKI, the Indonesian Government chooses to “burn” good money because the USD50 CPO export levy has also contributed to the drop in Indonesia's CPO prices by 25% from an average of USD614.20 per metric tonne (year 2015), compare to USD818.20 per metric tonne (year 2014). Although both Indonesia and Malaysia are within the same region and produce the same CPO, the nett Indonesia's CPO international market price is about USD50 lower than Malaysia due to the export levy imposed.  Established Indonesian CPO exporters and CPO refineries choose to pass this export levy burden to local CPO mills through much lower local CPO price, as well as to smallholders through significant and unfair discounted FFB prices from recommended by Directorate General of Plantation and Agriculture  price list. Therefore, in 2015, although the CPO export has increased in quantity to about 26.40 million metric tonnes (21% increase) as compared to 2014 of 21.76 million metric tonnes but in term of value, Indonesian has suffered loss of about 11.67% from CPO export revenue where it recorded CPO export revenue of USD18.64 billion (year 2015) and USD21.1 billion (year 2014). This is evident that good money is being “burned” for bad money (from the biodiesel program) and which also attributed to the fall in Indonesia's foreign exchange revenue and reserves.

The Government should realize that if the existing CPO export levy were to continue, it would cause damage beyond repair, especially to the country's economy and to the smallholder planters, i.e. the group that make up to approximately 49% of Indonesia's oil palm planter community. It is urged, in its aspiration to implement sustainable energy in its administrative policy, the President's administration should put the people's interest and welfare first by either total abolishment of the export levy or through a reasonable export levy mechanism which would be imposed on staggered tier basis at certain threshold of CPO price and not USD50 per metric tonne levy across the board.  

We should take advantage of Indonesia's position as the world's biggest CPO producer to generate good money from this valuable commodity, instead of mismanaging it and fail to see the golden value of this commodity in transforming and upgrading the livelihood of the population of Indonesia, especially the poor, the small farmers who have been suffering long enough from oppression by the rich, giant corporations and irresponsible parties for their self-interest.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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