Hoax 1 : Oil Palm Plantations Exploit Local Resources and Create Backwardness in Rural Areas.
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Is oil palm plantations exploit local resources and create backwardness in rural areas ?
Since the beginning, or at least since the 1980s, the development of oil palm plantations in Indonesia, both as part of agricultural development and regional development (through a transmigration program), has been aimed at opening and building new economic growth centers in rural areas. Underdeveloped areas, periphery, remote, isolated and hinterland areas, are developed into new growth centers.
The development of oil palm plantations is a pioneering economic activity in the context of rural development. The government has introduced several cooperative programs of plantation development that involve main plantation companies called nucleus (“Inti”) and individual farmers called plasma farmers. The largely empty, isolated and underdeveloped rural areas, designated by the government as oil palm plantation development areas, are developed by state-owned enterprises (BUMNs) and/or private companies as nucleus while the local communities are developed as the plasma.
Considering that the area is still isolated, the state and private companies must open the area with access roads and bridges. In this case, they have to construct farm roads, development nucleus and plasma plantations, build employee housing, educational and health facilities, social and public facilities and maintain the young oil palm plants (see figure 1).
The development of new nucleus-plasma plantations has attracted investments from local farmers who are not part of the nucleus-plasma scheme to jointly grow oil palms on their land and these plantations are categorized as people’s plantations. The number of individual smallholder has estates grown rapidly in many places and, therefore, the areas of people’s plantations are larger than that of the nucleus-plasma plantations (PIR).
Figure 1 : Component of early investment into oil palm plantations in rural areas (PASPI, 2014)
The growth of oil palm plantations, either under the nucleus-plasma scheme or by independent farmers, leads to the flourishing of small and medium cooperative (UKMK) businesses in the supply of goods and services, as well as traders of agricultural, fishery and livestock products to the oil palm plantation communities (Figure 2).
In the later stage of oil palm growth, especially after producing crude palm oil (CPO), there is the development of residential centers, offices, markets, etc. in such a way that as a whole it becomes a new agropolitan, a new agricultural town.
According to the Manpower and Transmigration Ministry (2014), by 2013 at least 50 rural and disadvantaged regions were developed into new growth areas whose basis is CPO production. They are Sungai Bahar (Jambi), Pematang Panggang and Peninjauan (South Sumatra), Arga Makmur (Bengkulu), Sungai Pasar and Lipat Kain (Riau), Paranggean (Central Kalimantan) and other areas. Most of the CPO production centers have developed into new districts or regencies in rural areas.
Figure 2 : The process of oil palm plantation development from an isolated area into a new economic growth center (PASPI, 2014)
- PS : Private Plantation
- PN : State Plantation
- PRP : Plasma Famers’ Plantation
- PR : Independent Plantation
- SB : Supplier of Goods / Services
- SF : Food Supplier
The following are new economic growth centers resulting from oil palm plantation development: (1) North Sumatra (Stabat, Belarang, Sei Rampah, Limapuluh, Perdagangan, Rantau Prapat, Aek Kanopan, Aek Nabara, Kota Pinang, Sosa, Sibuhuan, Panyabungan and others), (2) Riau (Pasir Pengaraian, Bangkinang, Siak Sri Indrapura, Rengat, Tembilahan, Bengkalis, Bagan Siapi-api, Teluk Kuantan, Dumai, Pekanbaru and others), (3) South Sumatra (cities like Sungai Lilin, Tugumulyo, Pematang Panggang, Bayung Lencir, Musi Rawas, Peninjauan and some cities bordering with South Sumatra, such as those from Muara Enim to Lahat), (4) Jambi (Sarolangun, Sungai Bahar, Sengeti, Kuala Tungkal and others), (5) Central Kalimantan (Sampit, Kuala Pembuang, Pangkalan Bun, Kasongan and others), (6) East Kalimantan (Sangatta, Tenggarong, Tana Pase, Tanjung Redeb, Nunukan, Sendawar and others), (7) South Kalimantan (Batulicin, Kotabaru, Pelaihari and others) and (8) Sulawesi (Mamuju, Donggala, Bungku, Luwu, Pasangkayu and others).
Thus, oil palm plantations in rural areas do not exploit rural resources but instead, through the development of the plantations, attract substantial new investment into isolated rural areas in such a way as to transform underdeveloped areas into new growth centers. This statement is also confirmed by the World Growth (2011) study, which says that oil palm plantations in Indonesia are an important part of rural development.