May 9, 2018 / 9:19 AM / a year ago

REFILE-Indonesia expands palm replanting programme to raise smallholder output

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JAKARTA, May 9 (Reuters) - Indonesian President Joko Widodo plans to expand a palm replanting scheme he started last year to cover 185,000 hectares (457,000 acres) of plantations in 2018, according to government press releases on Wednesday.

Widodo kicked off the scheme, which was funded by a levy on palm oil exports, in October 2017. The government aimed to replant palm trees on 20,000 hectares of smallholder plantations to try to increase output last year.

Indonesia is the world’s top producer of palm oil.

“We must work hard to be at the forefront of management including for this rejuvenation programme,” Widodo said, according to a press release by the Coordinating Ministry of Economic Affairs.

The government is looking to replant palm trees that have aged more than 25 years on a total of 5.61 million hectares of plantations all over Indonesia, the ministry said.

Smallholder plantations produce only 2 to 3 tonnes of fresh palm fruit bunches per hectare a year, much smaller than the productivity of plantations owned by large corporations, the Indonesia Estate Crop Fund said in a press release.

The Crop Fund manages the revenue raised by the palm oil exports and is paying for the replanting programme.

The government has said yields could be boosted to 8 tonnes per hectare a year if existing palm trees were replanted using better seedlings, with the new trees starting production within two years.

Indonesian palm oil exports have come under pressure in Europe where European Union lawmakers have approved draft measures that would ban the use of palm oil in biodiesel from 2021.

At the same time, the EU recently removed anti-dumping duties for imports of biodiesel containing palm oil for some Indonesian producers.

Plantations that receive funding through the replanting scheme will have to receive Indonesian Sustainable Palm Oil (ISPO) certification, which means they must be legally owned, do not encroach on forest areas and use good agriculture practices without burning.

Reporting by Bernadette Christina Munthe; Writing by Gayatri Suroyo; Editing by Christian Schmollinger

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