Indonesian oil palm smallholders sue state over subsidy to biofuel producers

JAKARTA — Oil palm farmers in Indonesia are mounting a legal challenge to get a bigger share of a government fund they complain is being misused to subsidize biofuel producers. The Indonesian Oil Palm Plantation Fund, or BPDP-KS, was set up in 2015 to manage an export levy imposed on exports of crude palm oil and processed palm oil products. In 2017, it collected 14.2 trillion rupiah ($1.03 billion) in funds, which, under its charter, it is obliged to use for “human resource development, research and development, and rejuvenation of plantations.” But representatives of the main union of oil palm farmers in Indonesia, the SPKS, say the government has failed in carrying out the last part of that obligation, and are now challenging the constitutionality of the fund allocation in court. “The fund allocation right now looks very unjust and harms farmers,” Marselinus Andry, head of the union’s advocacy department, told reporters in Jakarta. Rather than being used to help small farmers replace their aging palm trees with higher-yielding variants, he pointed out, the collected levies are largely used to subsidize major producers of biofuels that use palm oil. Only 1 percent of last year’s fund went to small farmers in the form of funding for a state-run replanting program. By contrast, 89 percent of the funds collected by the BPDP-KS were channeled to 19 large companies as biodiesel subsidies. The rest of the money was used for human resources development, research, and promotion. A plantation worker applies herbicide to…

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