The development of oil palm plantations, either by private companies, state-owned enterprises (SOEs) and SMEs (farmers, suppliers), creates new employment opportunities in rural areas. Based on data from the Agriculture Ministry (2015), the number of employees working in oil palm plantation companies increased from 717,916 people (2000) to 3.4 million people (2016).
Thus (Table 1), the number of workers absorbed directly was about 2 million people in 2000 and increased to about 7.8 million people in 2016.
Table 1: Growth in the number of workers at oil palm plantations
|Oil palm farmers||1,360,000||3,420,000||4,104,100||4,281,548||4,432,362|
|Oil palm plantation workers||2,077,916||4,619,552||7,306,300||7,633,970||7,886,894|
Source: Agriculture Ministry (2015), various data
It is estimated that the rural labor force absorbed in oil palm plantations will continue to increase with the intensification and growing size of oil palm areas. Employment opportunities are also created outside of oil palm plantations from indirect effects and induced consumption effects from the growth of oil palm plantations.
The sectors in rural areas (Table 2) whose employment growth is the result of increased palm oil production are agricultural services, trade, restaurants, hotels and others.
Table 2: Rural economic sectors whose labor absorption has increased because of CPO growth
|2||Trade, Restaurant, Hotel|
|3||Husbandry, Animal Health and Fishery|
Source: Table I-O Indonesia
Based on the above data, it is clear that oil palm plantations have a very big role either directly or indirectly in lowering unemployment rates in rural area.