JOURNAL MONITOR EDITION 22 : EMPIRICAL EVIDENCE OF THE ROLE OF OIL PALM PLANTATIONS IN GDP-REGIONAL AND REDUCING POVERTY
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Oil palm has become a strategic commodity for Indonesia. The economic benefits that Indonesia receives from oil palm plantations are indisputable. Exports of palm oil and its derivative products have also been recognized as a source of foreign exchange for non-oil and gas product groups. In fact, the contribution of the palm oil industry and its derivative products as foreign exchange contributors is also more recognized amid the pandemic, namely by generating an accumulated export value of USD 8.43 billion during January-May 2020 (BPS, 2020).
The contribution of oil palm plantations is also felt by 235 regencies in Indonesia that are centers for palm oil production through increasing local revenues to reducing poverty. The presence of private companies in rural areas has an impact on improving the welfare of farmers in rural areas. However, until now, there is still the opinion of the community, especially those who are anti-palm oil, who say that the oil palm industry is only controlled and enjoyed by large-scale companies and does not contribute to the economy of production centers.
Many result research shows that the existence of oil palm plantations is proven to have an impact on increasing Gross Regional Domestic Income (GRDP) in oil palm central areas. Increased production of CPO (for example due to consumption, downstream investment, exports) will create economic benefits that are not only felt in the oil palm plantation itself, but these benefits occur outside of oil palm plantations (regional economic sector) such as financial institutions, trade/restaurants , hotels, transportation, infrastructure, and other sectors.
The real proof is the creation of a new economic center as a new agricultural cities based on oil palm plantations in remote areas. In addition to increasing GRDP, the development of oil palm plantations in rural areas is also able to produce other economic benefits, namely reducing poverty. This also shows that oil palm plantations have actively become actors and take part as a solution in order to achieve SDGs-1, poverty reduction (No Poverty).