REPUBLIKA.CO.ID, BANDUNG -- Government plans to restrict land expansion for palm oil plantations to a maximum of 100 thousand hectares. Deputy Minister of Agriculture, Rusman Heriawan said that the plan will be written in Minister Regulation No. 98/2013 on Plantation Business License Guidelines.

This regulation will also be implemented by company's subsidiary, so Indonesia can reduce eroded land by palm oil. Company, which has land capacity over 100 thousand hectares must conduct business diversification. They can develop other business commodities, such as sugar cane and cocoa.

"There is a justice principle. There will be not just one or two companies that can control palm oil plantations," Heriawan said recently.

Giant company which has land capacity of 500 thousand hectares will not get new permission to add land, including its subsidiaries. Central and local governments are expected to be careful in giving land permission. Heriawan is optimistic that the rule will give benefits for farmers as company's licensing must provide 20 percent of farmers' ownership.

Secretary General of Indonesian Palm Oil Growers Association (Apkasindo) Asmar Arsjad said that the Minister regulation had multiple interpretations. Employers are required to sell 20 percent of their shares to farmers. The question, can farmers buy shares? He said that majority of Indonesian farmers cannot buy shares. He hopes that this new regulation will be socialized to all provinces in Indonesia.

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