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In a significant policy shift aimed at restructuring the domestic agricultural economy, Indonesian President Prabowo Subianto has directed local cooperatives to fully immerse themselves in the palm oil sector's comprehensive supply chain. The directive extends across all operational tiers, including upstream plantation management, the intermediate processing of crude palm oil (CPO), and the subsequent production of downstream derivative commodities. According to Cooperatives Minister Ferry Juliantono, this structural shift is specifically engineered to break private sector monopolies and introduce a more equitable market framework for independent local farmers.
Minister Juliantono explained during a press briefing in Jakarta that the industry has traditionally been heavily partitioned under private ownership, noting that private corporations historically dominated the cultivation, extraction, and downstream manufacturing stages. Under the newly issued presidential mandate, the administration plans to systematically integrate public cooperatives into every single phase of the production and derivative manufacturing processes to disrupt this private consolidation.
The primary objective behind this integration is to directly reinforce the economic sovereignty of the populace while guaranteeing that independent oil palm cultivators secure higher value-added returns from their harvests. The minister highlighted an ongoing structural irony within the domestic market, noting that independent farming communities often find themselves queuing to purchase basic cooking oil despite collectively owning the foundational oil palm resources. To rectify these systemic imbalances, the state is repositioning small-scale cooperatives as industrialized entities equipped to oversee plasma plantations and manufacture final, consumer-ready household essentials.
To facilitate this strategic transition, the Cooperatives Ministry has formally entered into a memorandum of understanding with state-owned enterprise PT Agrinas Palma Nusantara. The agreement establishes a cooperative-centered ecosystem wherein domestic cooperatives will assume management over Agrinas' plasma plantations. Concurrently, these agricultural cooperatives will receive intensive corporate capacity-building, institutional training, and advanced management cultivation programs to elevate their operational quality to modern corporate partnership standards.
Furthermore, the ministry revealed that it will officially launch a flagship, cooperative-owned CPO processing factory in Musi Banyuasin, located in South Sumatra, in late July or early August 2026. Spanning over 3,100 hectares and maintaining a high-capacity production output of 60 tons per hour, this industrial facility is designed to serve as the definitive operational blueprint for scaling similar palm oil cooperatives across the archipelago. The administration eventually intends to duplicate this cooperative-led framework across other vital agricultural sectors, including corn, soybeans, and cassava, to elevate grassroots economic contributions nationwide.
Source: ANTARA News
