Not Right On Target, Implementation Of Palm Oil Export Levy Funds Needs To Be Evaluated

Illustration. (Photo: Doc. Antara)

JAKARTA - The government was asked to evaluate the application of the palm oil export levy fund because its utilization was deemed not to be on target.

"It is not at all right on target as we see that many of the management funds from palm oil are returned to the producers of palm oil processing funds as well as palm oil exporters. There are even companies that profit from subsidizing palm biodiesel," said a researcher at the Institute for Development of Economics and Finance (Indef). ) Nailul Huda in a written statement quoted by Antara, Tuesday, August 16.

Nailul said that the government is currently implementing a suspension or temporary lifting of palm oil export levies to stimulate palm oil exports again in the hope of boosting the price of palm oil at the farmer level.

However, a number of parties view that the temporary lifting of palm oil export levies is unlikely to be effective enough to improve the climate of the palm oil industry which is currently not doing well. He said that a thorough evaluation of the use of these palm oil funds was needed.

"Don't let it, when the palm oil levy is re-implemented, there will be a new burden for the palm oil industry players, both producers, processing factories and farmers. In fact, they themselves do not feel the benefits of the application of the palm levy funds," he said.

On the other hand, the use of palm oil funds for the procurement of biodiesel is also considered not in line with the spirit of developing the palm oil industry as the initial goal of implementing this palm oil export levy fund.

"The current utilization is mostly used for subsidizing the biodiesel program. Even though there are other targets such as increasing human resources for farmers, rejuvenating palm oil, and others, the portion of which is very small. Not to mention other portions. So the current allocation is very unequal," said Nailul. .

The Palm Oil Plantation Fund Management Agency (BPDP-Palm) has collected funds of approximately Rp. 137.28 trillion from discounts on export sales of CPO (Crude Palm Oil) since it was formed in 2015 until 2021.

According to Nailul, the use of the collected funds will not have much impact on oil palm farmers because the palm oil levy funds are mostly used to fulfill the mandatory biodiesel incentives.

The total incentives received by biodiesel producers are around Rp. 110.05 trillion in the 2015-2021 period or reaching 80.16 percent of the total palm oil funds.

However, the budget for the palm oil industry is very minimal. Until 2021, of the total palm oil levy funds, the palm oil rejuvenation budget is only IDR 6.59 trillion, equivalent to 4.8 percent. Meanwhile, the human resource development budget (farmers) is only Rp. 199 billion or only 0.14 percent of the total palm oil funds.

"The urge to evaluate the application of palm oil export levies or palm oil funds has not been voiced once or twice," he said.