The government plans to carry out a fundamental transformation in the national palm oil industry by strengthening the role of cooperatives. President Prabowo Subianto directed that cooperatives should no longer just manage plantations, but also take part in the entire business chain, from crude palm oil (CPO) processing to the distribution of finished products such as cooking oil.
Minister of Cooperatives, Ferry Juliantono, emphasized that this step was taken to address the economic inequality that has historically occurred in the palm oil sector. Currently, private sector dominance in both plantations and processing industries has prevented farmers from optimally enjoying the economic value added. The ironic phenomenon where palm oil farmers struggle to access affordable cooking oil is a strong reason for the need to overhaul the trading system.
To realize this new ecosystem, the Ministry of Cooperatives has partnered with PT Agrinas Palma Nusantara (Persero) through the signing of a memorandum of understanding. This collaboration is designed to assist cooperatives in managing plasma plantations, while also providing management capacity building to enable them to compete professionally as industry players.
As a concrete step, the government will inaugurate a cooperative-based CPO mill in Musi Banyuasin, South Sumatra, in late July or early August 2026. This facility, with a production capacity of 60 tons per hour, will serve as a strategic pilot project for cooperative development in other regions.
Ferry added that this initiative is part of the government's grand vision to expand community involvement in strategic commodity business chains. Apart from palm oil, the government is committed to encouraging cooperatives to enter other food sectors, such as corn, soybean, and cassava development, to create a people-based economic independence.
