BANGKAPOS.COM, BANGKA — Lecturer of the Faculty of Economics, University of Bangka Belitung (UBB), Devi Valeriani does not deny, the drop in the price of fresh fruit bunches (FFB) of oil palm among farmers in Bangka Belitung, has an impact on economic growth.
“The decline in global FFB prices also has an impact on local farmers. It is suspected that the cause of the decline is several indications, one of which is the policy of reducing palm oil consumption by India and China by 4.8 million tons per year,” said Devi, Monday (27/27). 6/2022).
Furthermore, he mentioned another indication that echoed the cause of the decline in FFB prices, according to the American Soybean Association (American Soybean Association/ASA), marketed soybean oil to the market in large quantities, namely 2 to 3 million tons.
“Palm farmers everywhere, including Bangka Belitung, scream with this condition. The price they currently get at the collector level is only Rp. 700/kg and at the factory Rp. 1000/kg. This price is felt to be irrational, considering the production costs incurred do not cover from the selling price obtained,” he said.
He did not deny, of course, this condition causes losses for farmers. The impact that will be felt by the decline in FFB prices globally will have an effect on the national and local economy.
“Especially for areas where the mainstay and superior commodity is oil palm. Where when the price of FFB drops drastically, the income of farmers will decrease, then farmer households will reduce consumption and hold back on investing and hold back on making loans,” he explained.
He said, this condition will more or less affect regional economic growth, because palm oil is one of a number of plantation commodities that provide a lever for regional economic activity.
“But overall for Bangka Belitung, the decline in palm oil prices will not have an impact on Bangka Belitung’s economic growth, it will drop drastically, because there are other leading commodities that support economic growth, namely tin, rubber and pepper commodities as well as the service sector,” he said.
However, oil palm smallholders remain a concern given the position of oil palm farmers who are an important element of the sustainability of the palm oil sector.
“Palm price fluctuations are not the first time this has happened, so farmers should have carefully anticipated these conditions. This means that farmers are expected to be able to do other alternative businesses and not rely entirely on oil palm, because there are still many other sectors that can be developed, they do not have to rely on one commodities only, so that when the FFB price declines, there are other reliable businesses,” he said.