The palm oil plantation sector plays a crucial role in supporting Indonesia's economy, resilient even amid challenges like the COVID-19 pandemic. Ahmad Junaedi Karso, a Political Science lecturer at the University of Muhammadiyah Makassar, emphasizes the significant contribution of the palm oil plantation sector to the national economy. He underlines its importance, not only economically but also in fostering local community welfare. Junaedi also stresses the necessity of good governance, particularly in the management of palm oil plantations by State-Owned Enterprises (BUMN), citing their substantial contribution to national development, as stipulated in Law No. 39 of 2014 regarding Plantations.
Data reveals Indonesia's palm oil plantation land area surpasses Malaysia's by twice the size, with Indonesia covering 11.75 million hectares compared to Malaysia's 5.3 million hectares, approximately 23% of the world's total palm oil plantation area. Despite COVID-19 negatively impacting commodity exports, including palm oil, Indonesia maintains its position as a leading producer. In 2023, Indonesia's palm oil exports increased by 4.84% year-on-year, reaching around 27.5 million tons, the highest since the 2020 pandemic. However, the export value in 2023 amounted to USD 23.97 billion, down by 19.08% year-on-year, marking the lowest in three years. Moreover, Eliza Mardian, an Economist from the Center of Reform on Economics (Core) Indonesia, underscores that the agricultural sector, including plantations, remains a backbone of Indonesia's economy, even during crises. Apart from significantly contributing to the Gross Domestic Product (GDP), this sector also employs a large workforce, accounting for over 27%. Hence, palm oil plantations not only serve as economic assets but also as key pillars in ensuring Indonesia's economic resilience, deserving deeper appreciation and attention in national development efforts.
