Indonesia is set to make strategic changes on coconut and cocoa based industries, as stated by Indonesia Coordinating Minister for Economic Affair, Airlangga Hartarto, post limited cabinet meeting chaired by President Joko Widodo on Wednesday (10/7/2024) in Istana Merdeka.
The Palm Oil Plantation Fund Management Agency (PFMA), currently responsible for managing funds from the palm oil industry, is given directives by President Joko Widodo to allocate resources to establish seed farms, conduct research, and implement extension programs for coconut and cocoa farmers. This expanded role is expected to stimulate growth in both sectors and contribute to the nation’s economic development.
According to Airlangga, the President emphasised the importance of supporting smallholder farmers by providing them with high-quality seedlings and technical assistance.
“The most important thing is that the smallholders should get the seeds from universities or research agencies that PFMA would fund, which means, it would not only be palm oil but also should revitalise cocoa and coconut,” the Minister said.
While this initiative is welcomed by the coconut industry, serious challenges persist. A 2020 research paper by the Indonesian Agency for Agricultural Research and Development (IAARD) revealed a complex set of factors hindering coconut production.
Coconut senility, coupled with the prevalence of pests and diseases, has significantly reduced Indonesian yields. The reliance on inferior varieties and poor agricultural practices has exacerbated the problem. Moreover, the conversion of coconut land to other crops has shrunk the cultivation area. These issues, combined with an inefficient supply chain and limited product diversification, have negatively impacted farmers’ livelihoods.
Approximately 6.6 million Indonesian farmers depend on coconut farming for their primary income. To reverse this decline, a comprehensive approach is essential, including the development of high-value products, replanting efforts, and robust pest management strategies. Strengthening collaboration among the government, industry, and farmers is crucial for successful implementation.
Data from the Indonesian Directorate General of Estate Crops highlights the urgency of the situation. With 86.62% of the coconut estate classified as senile or mature, the need for replanting is paramount. However, the shortage of certified coconut seedlings remains a significant obstacle.
Despite government initiatives, the gap between seedling supply and demand persists. Notwithstanding that the global outlook for the coconut product market is positive and global market demand for coconut derivatives are increasing; it is presently difficult to visualise a positive future for the Indonesian coconut sector.
Sustainable coconut development would need to become an Indonesian national priority to have the resources allocated for change. Collaboration between industries, SME’s, start-ups and the coconut farmers community needs to be curated. The issues of uneducated and unorganised farmers need to be addressed through capacity building programs, and similar to India perhaps the formal establishment of large farmer groups with legal status (cooperatives) could provide a potential solution to aggregation of the farmer base.
The issues Indonesia’s coconut industry is facing are systemic, long standing, and well documented by Indonesian stakeholders, as each year passes the senile and mature estate becomes larger and less productive. It is not difficult to envisage an eventual collapse and demise of the coconut crop in Indonesia without an ‘Indonesian Coconut Miracle’.
Credit: By Coconews Editor, Natasha Ellington Letik.
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