Indonesia: Palm oil lobby angry over Joko Widodo's move to limit slash and burn farming

Last month Singaporean said the country suffered losses of about S$700 million due to large-scale haze in 2015.

Indonesia's palm oil industry is upset over President Joko Widodo's plan to ban plantation companies from clearing new land each year for cultivation in a bid to tackle forest fires.

As part of measures to limit forest fires that cause thick haze to drift over to Singapore and Malaysian cities, Widodo last week asked plantation firms to increase productivity through scientific means rather than engage in slash and burn cultivation.

The president said palm oil firms must raise yields of existing plantations through means such as the use of right seeds and not indulge in clearing additional land every year.

Green organisations welcomed the proposal, but plantation industry is miffed over the president's move. "The president's suggestion of doubling Indonesian palm growers' productivity is easier said than done," Togar Sitanggang, a senior official at Musim Mas, told the Jakarta Globe.

"The problem with productivity has been there for years. There is no budget for this," Sitanggang said, adding that it was not clear how companies will pay for better seeds.

The report says smaller plantation companies will be harder hit by the new proposal while big producers like Sinar Mas Agro Resources, Astra Agro Lestari and Wilmar International could withstand the effect of the curbs.

Palm oil is a major agricultural produce of Indonesia and it brings in valued foreign exchange. Indonesia's palm oil output in 2015 stood at 32.5 million tonnes. Palm oil exports raked in $19 billion in the last year, accounting for 13 percent of the country's overall exports.

Analysts say the curbs on using new land for cultivation will affect the viability of small holders, who account for almost 40 percent of the production.

"Our reputation as the biggest palm oil producer will be history," Eddy Martono of the Indonesian Palm Oil Association told the daily.

Indonesia has drawn flak for the massive deforestation its plantation industry is causing every year and the haze that wafts across to Singapore and Malaysia, causing cropping health hazards in those places.

Despite a moratorium on clearing primary forest and peat-land, the area under palm oil cultivation in the country increased by around 9 percent last year.

Last month Singaporean officials said the country suffered losses of about S$700 million due to large-scale haze that enveloped the city state during 2015.

Environment and Water Resources Minister Masagos Zulkifli said greater bilateral cooperation was required to address this annual hazard.

The minister's revelation came even as Indonesia warned that it expects dryer than normal weather this season.

Choking smog drifts off into Singapore and Malaysian cities, sometimes even up to Taiwan and Bangkok, every year as farmers start fires to clear land for palm oil plantations.

Here's a Reuters Factbox that gives a detailed account of the cost of Indonesia fires every year.