Palm oil drive to continue: Jakarta

Minister defends expanding cultivation even as global demand for commodity falls
Wahyudi Soeriaatmadja, Straits Times 20 Nov 08;

JAKARTA: The Indonesian government has defended the country's drive to expand oil palm cultivation, resisting demands by environmentalists who say it is destroying the country's natural forests and peatlands.

Agriculture Minister Anton Apriyantono has said that Indonesia would still retain 60 per cent of its forests, in addition to the 23 million ha already marked out as protected forest.

Besides, he told an annual meeting on sustainable palm oil in Bali earlier this week, any moratorium on deforestation, as environmental group Greenpeace recently demanded, was beyond the government's control.

Yesterday, a forestry official said Indonesia will plant 100 million trees this year to limit deforestation.

Global demand for palm oil - which apart from being used in cooking and food products, is also increasingly being used as an alternative biofuel - has seen more land being cleared for bigger plantations.

Environmentalists say the rapid deforestation threatens the survival of native wild orang utans in the forests.

The expansion of oil palm cultivation often creates thick haze - caused by companies and farmers using slash-and-burn methods to clear the land - that can spread to the skies above Singapore and Malaysia.

The minister's remarks immediately drew a sharp response from environmentalists.

Mr Arif Wicaksono, Greenpeace's political adviser in Indonesia, said Mr Anton's statement contradicted a commitment made by the government last year, when it said new crops would not need to be planted on natural forest.

'If they say 'no' to a moratorium, that means Indonesia intends to destroy its forest in the name of palm oil,' Mr Arif told The Straits Times yesterday.

'They shouldn't use new land, as they can use the existing, degraded lands to grow their new crops.'

The government says only 6.8 million out of the country's 133 million ha of land - or about 5 per cent - have been planted with oil palm.

But non-government organisations say the figures are much higher: According to independent monitor Sawit Watch, a further 18 million ha have been cleared, on top of the land already planted.

Last week, Greenpeace stopped several shipments of palm oil from leaving Indonesia.

Mr Anton, however, had noted the economic necessity of oil palm cultivation.

Palm oil serves as one of the main drivers of Indonesia's economy. Last year, the country earned US$7.9 billion (S$12 billion) from palm oil exports, up from US$4.8 billion the previous year. Palm oil accounted for about 7 per cent of the country's total exports last year.

Indonesia is now the world's largest crude palm oil producer. It churned out 17.4 million tonnes last year and is expected to produce 19.8 million tonnes this year.

The agriculture ministry projects oil palm cultivation to expand to cover 7.7 million ha next year, up from an estimated 7.16 million ha this year.

But analysts point out that with crude palm oil prices falling as a result of weakening global demand, this is not the right time to talk about expansion.

Indeed, some oil palm growers are already cutting back expansion plans. Astra Agro Lestari, Indonesia's largest publicly-listed oil palm grower, earlier this year set a target to grow 30,000 ha of new oil palm trees in the year, but is now planning to trim it to 20,000 ha.

'Low crude palm oil prices and high fertiliser prices have been our reasons for the cut,' head of investor and public relations Tjahjo Dwi Ariantono told The Straits Times.

Next year's expansion plans, he added, would depend on the price of crude palm oil futures. He said: 'If it falls further, then we have to put a brake on expansion so that we won't be throwing away the cash money that we have.'