Indonesia to invest palm oil export tax funds in cocoa and coconut

Indonesia aims to diversify its agricultural economy by using funds from palm oil export tax to support the cocoa and coconut sectors. These funds will be managed by BPDPKS, the agency responsible for collecting and managing the palm oil export tax. This move comes as Indonesia seeks to guarantee the security of its cocoa supply, which has seen an annual drop of 8.3% between 2015 and 2023. However, the decision has received criticism from small palm oil producers who argue that there is still not enough financing for palm oil producers and urge the government to reconsider the decision.

In a strategic move to diversify its agricultural economy, Indonesia plans to use funds raised from palm oil export tax to finance the development of the country's cocoa and coconut sectors. This decision was announced by Commerce Minister Zulkifli Hasan during an interview with Reuters. Since 2015, Indonesia, the world's largest palm oil exporter, has collected a levy intended to fund its palm oil biodiesel program, replanting initiatives for smallholder farmers and palm oil research. These funds will now also be directed to support the cocoa and coconut sectors. “Initially, we planned separate agencies for cocoa and coconut, but it was decided to merge them with BPDPKS,” explained Zulkifli Hasan. BPDPKS, the agency responsible for collecting and managing the palm oil export tax, will now have an expanded role, also working in the development of these new agricultural areas. Coordinating Economy Minister Airlangga Hartarto added that Indonesia currently imposes a 0% to 15% export ...