09/06/2010 (The Jakarta Post) - The government should protect the palm oil industry, which is facing various threats and challenges, including a recent moratorium on the conversion of primary forests and peatlands for oil palm plantations, says an association.

“The palm oil industry should be well protected by the government due to the fact its significant contribution to the country’s non-oil and gas exports,” secretary general of the Indonesian Palm Oil Association (IPOA) Joko Supriyono, told The Jakarta Post on the sidelines of a seminar on palm oil plantations in Jakarta on Tuesday.

In addition, he said, the palm oil industry had also made significant contributions to improving people’s welfare given the fact that about 40 percent of the plantation areas were operated in cooperation with farmers.

“A moratorium or any kind of pressure toward the palm oil industry will therefore affect not only business players, but also local farmers that depend on this sector,” he said.

On May 26, the Indonesian and Norwegian governments signed a moratorium agreement under the reducing emissions from deforestation and forest degradation (REDD+) scheme, requiring Indonesia to stop converting primary forests and peatlands into oil palm plantations for two years. In return, Norway will provide US$1 billion in compensation.

Joko said the banning of the conversion of forests into oil palm plantations would damage the economy, and increase unemployment and poverty.

“The expansion of oil palm plantations should not worry us too much since it is conducted in line with the government’s regulations,” he said, adding that oil palm plantations would only be expanded on idle land including former forest concession areas.

He said the recent Indonesia-Norway moratorium on the conversion of forests for oil palm plantations was motivated by business competition.    

“We see a global effort to stop the expansion of Indonesia’s palm oil industry,” he said.

The moratorium, he added, was proposed by biofuel producers in European countries who felt an increase in crude palm oil (CP) production would threaten their businesses.

“They are worried that if palm oil will compete against their biofuel production from rapeseed due to the fact that palm oil is 6 to 10 times more productive than their biofuel products,” he said.