THE IMPACT OF GOVERNANCE POLICIES ON THE PRICE OF FRESH FRUIT BUNCHES (FFB) OF OIL PALM IN INDONESIA

Riyadi  Mustofa; Gulat Medali Emas Manurung; Riati  Bakce; Roslida binti Saat

doi:10.53067/ijomral.v5i4.479

Authors

Riyadi Mustofa Universitas Persada Bunda
Gulat Medali Emas Manurung Central Executive Board of Indonesian Oil Palm Farmers Association
Riati Bakce Universitas Persada Bunda
Roslida binti Saat Universiti Islam Melaka

DOI:

https://doi.org/10.53067/ijomral.v5i4.479

Keywords:

Oil Palm, Policy, Fresh Fruit Bunch (FFB) Prices, Government Policy, Independent Smallholders, Price Sensitivity., Kelapa Sawit, Kebijakan, Harga Tandan Buah Segar (TBS), Kebijakan Pemerintah, Petani Swadaya Swadaya Sensitivitas Harga.

Abstract

As a strategic commodity, oil palm attends as a major supplier of raw materials to worldwide industries and makes a substantial contribution to national income and foreign exchange earnings. The upstream and downstream segments of this industry generate significant multiplier effects across both the macroeconomic and microeconomic sectors while improving the welfare of smallholders and surrounding communities. However, global market dynamics frequently create uncertainty in the prices of Fresh Fruit Bunches (FFB). This study aims to evaluate the sustainability of smallholder oil palm plantations based on FFB price trends over the nine most recent pricing periods and to determine the socio-economic impacts and the sensitivity of the government's proposed single-gate export policy for strategic commodities on FFB prices among scheme and independent smallholders. The study employs the Ordinary Least Squares method to examine price trends. The findings indicate that FFB prices for both scheme and independent smallholders are highly vulnerable to changes in government policies. The price trend for scheme smallholders is represented by the linear equation (Y = 3,465.85 - 338.89X), whereas the price trend for independent smallholders is represented by the equation (Y = 3,394.11 - 36.42X).

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