Palm O’corner at Gadjah Mada University: Palm Oil is Proven Contributes to the National and Global Economy
PASPI (Palm Oil Agribusiness Strategic Policy Institute) once again held the Palm O’Corner at Gadjah Mada University (UGM) on Saturday (1/5). This oil palm education and literacy program is the result of a collaboration between PASPI and the Agricultural Socio-Economic Student Family (KMSEP) of the Faculty of Agriculture of Gadjah Mada University. The topic at Palm O’Corner this time was “The Contribution of the Palm Oil Industry in the National and Global Economy”.
Palm O’Corner at Gadjah Mada University presented speakers, namely: Dr. Tungkot Sipayung (Executive Director of PASPI); Dr. Jamhari, MP (Dean of the Faculty of Agriculture of Gadjah Mada University) and Marina Novira (Indonesian Trade Attache in Beijing).
In his presentation, Dr. Jamhari started the discussion by revealing his thesis research conducted in 1999 regarding scientific evidence of the contribution of the palm oil industry in the Indonesian economy. Using the Year Input-Output Table based on the Agricultural National Socio-Economic Survey from the Central Bureau of Statistics (BPS) shows that palm oil is a leading sector because of its above-average ability to can able to encourage the downstream sector (processing industry). In addition, palm oil is also capable of creating a large multiplier effect on increasing GDP output, absorption of labor, and increasing added value.
His thesis is also still in line with current conditions, where the palm oil commodity can help the agricultural sector to grow positively, saving the Indonesian economy from a bigger deficit in 2020. The role of the palm oil sector in the Indonesian economy is also shown by the absorption of labor that is more increasing. This industrial profile that is classified as labor-intensive can absorb million workers in which there are 2.3 million smallholder farmers. In addition, the increasingly downstream development of palm oil is also able to contribute to the greater export foreign exchange and the achievement of energy security through the development of palm biodiesel.
However, behind the large role and contribution of palm oil in the national economy, there are still several problems such as low productivity of palm oil (especially smallholder plantations), low ISPO achievement, downstream not yet optimized, and massive black campaign. At the end of his presentation, the Dean of the Faculty of Agriculture of Gadjah Mada University also said that palm oil is proven to be a commodity that has a strong attack power, but we have to build a defense line on its weaknesses.
Meanwhile, Dr. Tungkot Sipayung in the discussion on palm oil explained the role of the palm oil industry which not only contributes to the national economy but also contributes to the global economy, especially in palm oil importer countries. As a world champion among the Top-4 vegetable oils in the world and playing a role in feeding and biofueling the world, the downstream activities of palm oil that is carried out by importer countries have also been able to increase job creation by 2.7 million people and generate income (GDP) of reaching USD 38 billion in 2020 which distributed across India, China, EU, Pakistan & Bangladesh, Africa, and other countries.
In addition, palm oil has also proven to be pro-poor where the price of palm oil is cheaper than the price of other vegetable oils so that both palm oil and palm oil-based products are affordable for the poor. These advantages in palm oil prices can also act as a buffer so that can prevent the price of other vegetable oils from increasing excessively.
An interesting fact from the presentation of the Executive Director of PASPI is that the simulation shows that palm oil is a vegetable oil that saves deforestation. The phase-out of palm oil from the global market led to greater deforestation of 167 million hectares for the expansion of soybean, rapeseed, and sunflower plantations. In addition, oil palm cultivation with a doubling of productivity can also meet the growing demand for vegetable oil towards 2050 and without expanding global deforestation (zero deforestation). This means if the global community is committed to reducing global deforestation, so they must support due to palm oil classified as efficient and land-saving palm oil.
Seeing the great enthusiasm of the Palm O’Corner participants, which was not only followed by Gadjah Mada University students but also students from various universities in Indonesia, gave rise to high optimism for the creation of a positive image of palm oil. In this program, they provided various facts and data that show the great role of palm oil in creating inclusive economic and environmental benefits for the global community. This perception is very important for Indonesian students to have given the increasingly massive black campaigns of palm oil that are targeting millennials and gen-Z.
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