PONTIANAK — Indonesia’s Deputy Agriculture Minister Sudaryono delivered a blunt warning to palm oil mills: do not buy fresh fruit bunches (TBS) from farmers below the government’s official price. He issued the order while officiating the inauguration of West Kalimantan Governor Ria Norsan as Chairman of the HKTI West Kalimantan Regional Board in Pontianak on Sunday (26/1).
Global CPO (crude palm oil) prices are surging right now. Sudaryono said that is precisely why mills have no excuse to shortchange farmers.
“CPO prices are high, palm prices are high. Therefore, TBS must not be purchased below the price set by the government. That price is the result of an agreement between the regional government, palm oil mills, and farmers,” Sudaryono said, as reported by local West Kalimantan media.
The statement carries weight: West Kalimantan is a national palm oil production hub, home to thousands of small and medium-scale farmers who depend on the commodity. When global prices spike, profit margins for mills widen — and so does the risk of farmer exploitation.
Why the TBS Farmer Price Is Critical
Fresh fruit bunches are the farmer’s direct output. After harvest, TBS is sold to processing mills that produce CPO for export or domestic markets. The biggest profit margins sit with the mills, not the farmers.
If global CPO prices rise but mills keep buying TBS at the old — or even lower — price, the global windfall simply fattens mill revenues. Farmers stay poor even as the commodity they grow is booming. This is the paradox that has long plagued Indonesia’s plantation smallholders.
Sudaryono stressed that when market conditions are good, government and industry must act fairly. “There is no room for violations,” he said firmly. The TBS price jointly agreed upon by the regional government, mills, and farmers is a written commitment that must be honored.
A Welfare Pledge Under President Prabowo
Sudaryono reiterated the government’s commitment: farmers must prosper. Not empty rhetoric, but concrete action through fair baseline price-setting and enforcement.
He argued that rising global commodity prices represent a golden opportunity to improve the fortunes of farmers who have been marginalized for decades. The government intends to ensure that the benefits of this price boom do not flow only to mills and large traders, but also reach the small farmers who plant and tend the palm trees.
“In President Prabowo’s era, farmers cannot be left behind. Farmers must prosper,” the Deputy Minister said emphatically.
The policy aligns with presidential directives to prioritize food security and agricultural sector empowerment. Guaranteeing farmers a fair price, officials argue, will also boost their productivity and willingness to invest in their land.
Cutting Imports, Strengthening Local Output
The government is running an ambitious program: reducing import dependence for strategic commodities such as rice, corn, and sugar starting in 2025. Palm oil, though primarily an export commodity, also falls within the broader push to strengthen the national agricultural sector.
The logic is straightforward. When farmers are prosperous and their income is secure, they keep producing — and may even scale up investment in their land. If they are continually shortchanged, farmers sell their plots, migrate to cities, or simply cut back on production.
A stable national food security strategy needs farmers who are motivated and financially sound. Fair pricing is the foundation of that motivation.
HKTI West Kalimantan on the Front Line
Governor Ria Norsan, newly inaugurated as Chairman of the HKTI West Kalimantan Regional Board, takes on a significant responsibility. The farmers’ organization is expected to act as both a government extension arm and a grassroots farmer advocate.
“HKTI will focus on driving improvements in agricultural productivity, strengthening farmer institutions, and delivering real innovation and solutions for agricultural development in West Kalimantan,” Norsan said in his remarks.
HKTI’s mandate goes beyond disseminating price policies. It includes educating farmers about their rights, building institutional capacity for collective bargaining, and driving productivity innovation. The organization is also expected to serve as the government’s eyes and ears — detecting any mill that violates the agreed price.
Norsan called on all parties — government officials, mill owners, and farmers themselves — to collaborate in building a palm oil sector that is both fair and sustainable.
Taking It to the Streets: Community Walk and Affordable Food Fair
The HKTI West Kalimantan inauguration did not stop at ceremony. The event moved directly into the community with a public walkathon and an affordable food fair attended by thousands of Pontianak residents.
Those activities reflect an organizational approach built on action, not just words. The affordable food fair in particular was a direct response to public anxiety over staple food price stability — an issue that frequently erodes trust in agricultural pricing policy.
By drawing thousands of participants, HKTI West Kalimantan signaled that the farmers’ organization exists for the people, not merely for officials and bureaucrats.
Enforcement of fair TBS pricing will now serve as the real test of the government’s commitment to farmer welfare. If mills continue to violate the agreed price, the government’s credibility will take a hit. If the policy holds, it marks a meaningful step toward a more equitable and sustainable future for Indonesian agriculture.
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