Ina H Krisnamurthi, Indonesia’s ambassador in India, has said cooperation in policy and regulatory frameworks is important to promote trade and investment and suggested joint ventures and partnerships between companies from both countries to develop palm oil sector. Excerpts from an email interview:
As India has declared to become self-sufficient in edible oils and has also launched a Palm Oil Mission, what is the future of Indonesia’s export of palm oil to India 10 years from now?
We commend India’s initiative to achieve self-sufficiency in edible oils by launching the National Mission on Edible Oils—Palm Oil (NMEO-OP), which aims to expand plantations and enhance palm oil productivity. Self-sufficiency and self-reliance, especially in the food sector, are surely a vision that many countries, particularly emerging economies, would like to achieve. And for this effort, collaboration is key.
On palm oil, it is public knowledge that with a good seed, the yield would be around 5 tonnes/ha/year in around 4 years. Collaboration in increasing productivity of palm oil is important not only because we have to ensure that the supply is sustained, but also we have to guarantee that the demand is to be met continuously.
Both India and Indonesia have huge number of small holder farmers. Beyond palm oil, Indonesia and India have many more opportunities to explore and collaborate on issues that provide mutual benefits for the progress and development of both nations.
In what areas does Indonesia see any scope to work jointly with India in the oil palm mission?
Both countries have vast opportunities to collaborate closely in Research and Development (R&D). This collaboration could focus on developing high-yield, disease-resistant oil palm seeds, hybrid varieties, and sustainable agronomic practices to boost productivity.
As the world’s largest palm oil producer, Indonesia is a major player in promoting sustainable palm oil production through the Round table on Sustainable Palm Oil (RSPO) and the Indonesian Sustainable Palm Oil (ISPO) standards. Indonesia can share its expertise in oil palm cultivation, while India can provide insights from its experiences with other crop management practices.
Additionally, co-operation in policy and regulatory frameworks is important to promote trade and investment. This would encourage bilateral trade in the oil palm sector and boost production and processing capacities. Joint ventures and partnerships between Indian and Indonesian companies can also help establish processing units and develop infrastructure.
Is there a scope of barter system in rice-palm oil trade as both countries depend on these two products from each other?
We noted that India and Indonesia have complementary needs for certain commodities, with Indonesia requiring significant quantities of non-basmati rice, while India has high demand for vegetable oil. This complementary relationship presents a unique opportunity for both countries to engage in a strategic partnership. By leveraging their respective strengths and resources, Indonesia and India can work together to develop solutions that effectively address these demands.
Is there a scope for Indian businessmen to grow rice in Indonesia to help it also emerge as a producer?
As of 2023, Indonesia’s paddy production was estimated to be around 53.63 million tonnes, making it one of the world’s leading producers. However, despite its high production, Indonesia still needs to meet domestic demand, as rice is the staple food for most Indonesians. As a result, the country needs to import a considerable amount of rice while exporting only a small fraction of its production.
The Indonesian government actively encourages Indian investors to invest in various sectors, including agriculture, to develop local rice production capabilities. We are currently facilitating an Indian company in the agriculture R&D sector’s investment in Indonesia to develop rice seeds suitable for the country’s soil and climate.
Investment and collaboration, including technology transfer and the sharing of best practices and expertise, will enhance productivity and efficiency in Indonesian rice farming, leading to improved cultivation practices. This investment will also create significant employment opportunities for local communities, boosting the rural economy and livelihoods. Most importantly, this collaboration will enhance Indonesia’s food security.
Is the oil palm mission in India a threat to its biodiversity in the backdrop of the last 40 years of experience Indonesia has with this oil?
All activities on the earth’s surface that convert forests into non-forest areas, whether for vegetable oil crops, cereals, livestock, settlements, or other uses, will inevitably lead to biodiversity loss. The same is true for the expansion of vegetable oil crops such as palm oil, soyabean oil, rapeseed oil, and sunflower oil. Therefore, the question is not whether biodiversity loss occurs, but rather how we manage it.
A study revealed that the biodiversity loss associated with palm oil is the lowest among various vegetable oils i.e. soybean oil, peanut oil, sunflower oil, and rapeseed oil. The lower biodiversity loss of palm oil compared to other vegetable oils is understandable since oil palm plantations are developed in tropical zones, which are rich in sunlight and water.
Implementing sustainable agricultural practices, such as mixed cropping and agroforestry, is key to mitigating biodiversity loss. Sustainability standards like the RSPO provide guidance for promoting environmentally friendly cultivation.