Palm Oil Sector Struggling to Get Rid of Bad Seeds
By Arti Ekawati
The rapid expansion of palm oil plantations across the country over the last three years has spurred a boom in the production and trade of uncertified, low-quality palm seeds, with the recent drop in palm oil prices doing nothing to deter the rogue traders.
The extent of the problem was revealed in January when police seized some 1.5 million uncertified seeds in Aceh Province. The seeds, which were packaged to appear as if they had been produced by the state-run Indonesian Oil Palm Research Institute, or PPKS, had been destined to be sold to plantations in North Sumatra.
The authorities appear to be fighting an uphill battle to eradicate the production of uncertified oil palm seeds, however. Achmad Mangga Barani, the Agriculture Ministry’s director general of plantations, has acknowledged that the problem will persist as long as people are in the business of producing palm oil.
“The uncertified seed trade involves big profits and little effort,” Achmad said on Friday. “It’s just like selling drugs. The trade in uncertified seeds is an illegal but highly lucrative business.”
Achmad said a palm fruit bunch consisted of hundreds of seeds and could weigh up to 10 kilograms. Bunch sold for processing into palm oil fetch about Rp 1,000 (8 cents) a kilogram on average, so a grower can only make about Rp 10,000 per bunch.
However, individual seeds are worth at least Rp 4,500 each on the black market. “One bunch consists of more than two hundred seeds. If one seed is worth Rp 4,500, you can imagine how much they can make,” Achmad said.
Sumail Abdullah, the chairman of the Indonesian Oil Palm Growers Association, or Apkasindo, said that it was virtually impossible to distinguish certified seeds from uncertified ones.
“The difference really only becomes apparent about four years later, when the first harvest comes around,” Sumail said.
Genuine seeds, he said, normally yielded between 15 tons and 20 tons of fruit bunch per hectare annually — enough to produce about four tons of palm oil — while yields from uncertified seeds were up to 70 percent smaller.
The legitimate palm seed producers in Indonesia are the PPKS, PT Sucofindo, PT London Sumatra Tbk, PT Dami Mas Sejahtera, PT Tunggal Yunus Estate, PT Bina Sawit Makmur and PT Tania Selatan. All of these producers are based on Sumatra island.
Most of the fake seeds are packaged using the PPKS logo.
“This is simply because they are the biggest producers of palm seeds, with an output of 40 million seeds last year. So, people aren’t suspicious when they’re offered PPKS seeds,” said Dwi Asmono, the chairman of the Palm Seed Producers Forum, or FKPBS.
Dwi could not offer an estimate of the losses suffered by the PPKS, but said that the problem clearly damaged the institute’s reputation and credibility in the market.
However, he expressed optimism that the problem of uncertified seeds would be less severe this year, as lower demand would drive the unregistered seed producers out of business.
“We estimate that demand this year will only be around 90 million seeds, much less than the 200 million last year,” he said, adding that production of certified seeds would fall to 150 million, much lower than the national annual production capacity of 215 million.
Source: http://www.thejakartaglobe.com/business/article/11441.html
