The government is now targeting the strengthening of the role of cooperatives in the national palm oil industry supply chain. This strategic step follows up on directives from President Prabowo Subianto, who wants cooperatives not to be limited only to the plantation sector, but also to expand independently into downstream production stages.
Minister of Cooperatives, Ferry Juliantono, highlighted the ironic phenomenon where palm oil farmers often struggle to gain access to cooking oil. To end reliance on the private sector, cooperatives will be encouraged to own their CPO (Crude Palm Oil) processing plants integrated with derivative products, such as red cooking oil or standard cooking oil, which will later be distributed through the Merah Putih Cooperative network.
Concrete steps to realize this plan will begin with the inauguration of a cooperative-owned CPO factory in Musi Banyuasin, South Sumatra, scheduled for late July or early August. This factory is projected to have a production capacity of up to 60 tons per hour on 3,100 hectares of land.
Through the independence of these production facilities, cooperatives are expected to maintain price stability and the availability of cooking oil commodities at the local level. Thus, the welfare of palm oil farmers can increase along with the added value of products within the cooperative ecosystem itself.
