15/10/2026 (Gapki), Bangkok - Finance Minister Suahasil Nazara is encouraging the mobilization of private investment in the Indonesian palm oil sector to boost productivity, strengthen downstream processing, and create higher-quality jobs. Investments need to be directed not only toward increasing production but also toward developing the entire industry value chain, including strengthening the capacity of smallholders and creating sustainable value-added products.

The Finance Minister made the statement during the “Plantation360: Mobilizing Private Capital for More and Better Jobs” event, organized by EDS16 and the Council of Palm Oil Producing Countries (CPOPC) in Bangkok, Thailand, on Tuesday (13/10/2026). He emphasized that palm oil is a vital component of Indonesia’s economy, spanning everything from rural economies and manufacturing to the food and energy sectors.

Indonesia possesses over 16.8 million hectares of oil palm plantations, with approximately 41% managed by smallholders. This situation highlights the close link between the future of the palm oil industry and the well-being of rural communities. Consequently, increasing the productivity of existing plantations is a priority, enabling smallholders to raise their incomes without placing additional pressure on forest areas.

“The crucial question is not merely the amount of capital we can mobilize. A far more important question is where that capital flows and what outcomes can be achieved. If we want palm oil to contribute to inclusive growth, private capital must reach the entire value chain—including helping smallholders gain better access to financing, technology, markets, and knowledge,” the Finance Minister stated.

To achieve this, the Finance Minister emphasized three key measures. First, making sustainability a component of investment appeal. Indonesia is promoting downstream processing through the development of agriculture-based food products, oleochemicals, and biomaterials, alongside investments in processing technology and product innovation. Palm-based energy development—including the implementation of B50, green diesel, sustainable aviation fuel (SAF), the utilization of used cooking oil (UCO), and farm-based gasoline—also forms part of efforts to expand industrial value-added.

Second, strengthening the role of the government and development finance institutions to unlock investment opportunities that market mechanisms alone cannot fully manage. Risk-sharing instruments, technical assistance, and project preparation can help attract private capital for smallholder plantation replanting, supply chain traceability improvements, and downstream industry development. In this regard, the Plantation Fund Management Board (BPDP) supports sector strengthening through smallholder replanting, skills development, research, and infrastructure. Such support must be implemented transparently, effectively, and with fiscal responsibility.

Third, ensuring that smallholders are an integral part of the palm oil industry’s business model. Smallholders should not merely act as suppliers at the end of the value chain but also as producers and entrepreneurs with the potential to participate more deeply in industry development. Consequently, investment in the palm oil sector can create more productive jobs, enhance skills, improve working conditions, and expand economic opportunities for the community. These opportunities extend to agribusiness, logistics, processing, digital services, as well as engineering and technology.

The Finance Minister also emphasized that the creation of value-added and quality jobs must go hand-in-hand with environmental protection. Credible law enforcement is required to ensure that plantation activities are conducted in accordance with regulations and to safeguard the sustainability of Indonesia’s palm oil industry.

Since February 2025, the Forest Area Regulation Task Force has brought order to and reclaimed 6.2 million hectares of forest land previously used illegally, including for oil palm plantation activities. This measure is part of the government’s effort to regulate forest land use and strengthen the credibility of Indonesia’s palm oil industry regarding the implementation of sustainability principles.

The Finance Minister emphasized that economic development and environmental sustainability should not be viewed as conflicting goals. Through appropriate investment, increased productivity, the strengthening of smallholders’ roles, and the development of downstream industries, the palm oil sector can deliver broader economic benefits while simultaneously preserving the environment.

“Indonesia believes that the debate surrounding palm oil needs to move beyond a simple choice between development and sustainability. We must demonstrate that the two can reinforce each other. That is the true potential of Plantation360,” the Finance Minister concluded.

https://gapki.id/en/news/2026/10/15/govt-reveals-3-strategic-steps-to-push-palm-down-streaming/