26/12/2022 (Antara News), Jakarta - The construction of a red cooking oil factory, which was set for early 2023 in Deli Serdang, North Sumatra, is still pending as a legal basis for its establishment is yet to be formulated.

Cooperatives and Small and Medium Enterprises (SMEs) Minister Teten Masduki delivered the remarks at the “2022 Reflection and 2023 Outlook” event here on Monday.

Masduki said that his ministry is still waiting for the synchronization of the ministerial regulation on the use of funds from the Oil Palm Plantation Fund Management Agency (BPDPKS) for oil palm smallholder cooperatives.

"It (is estimated that) it may take until next month, so in January 2023, the construction can kick off," he added.

As soon as the regulation is complete, the funds owned by oil palm smallholders in the institution can be used for the production of red cooking oil, he informed.

"Because this uses funds owned by oil palm smallholders, which are collected from palm oil exports in the BPDPKS. So, that's the farmer's right. But currently, there are no regulations on their distribution. If the regulation of the Cooperatives and Small and Medium Enterprises Ministry has finished harmonization, this can be resolved," he added.

He said he expected the legal basis for the funding to be formulated soon so that the construction of the factory can begin without delay.

The pilot factory project will be implemented collaboratively by PTPN III, the Oil Palm Research Center (PPKS), and the Palm Oil Plantation Fund Management Agency (BPDPKS).

The minister said that the project rests on two main ideas. The first is to enable oil palm smallholder cooperatives some access so that they can produce their own oil palm and conduct downstreaming.

"So that all along they have depended on large industries to sell their crops, now they have the opportunity to produce their own palm oil. This way, the palm farmers can get added value from the harvests of their oil palm plantations," he explained.

The effort also serves as an alternative solution for people to get better, more reliable cooking oil.

"We want cooperatives to not (just) play in the marginal economy, but we want cooperatives to penetrate all sectors, including strategic sectors such as palm oil. We are a global player, we produce 50 million tons of palm oil. We are the largest producer. Now, oil palm farmers are part of the mainstream. This is a grand step that we must support," he said.

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