The Myths Vs Facts of Indonesia's Palm Oil Industry in Social, Economic and Global Environmental Issues Copy Rights Protected by Law Third Edition, 2017 © PASPI Cataloguing in Publication (KDT) The Myths Vs Facts of Indonesia's Palm Oil Industry in Social, Economic and Global Environmental Issues/Bogor: PASPI. 2017. xxxiv, 230 p. 21 cm 1. Economic of Development 2. Agribusiness I. PASPI ISBN : 978-602-74377-8-4 Preface to the third edition The Palm Oil Agribusiness Strategic Policy Institute (PASPI) has prepared and published this book The Myths vs Facts of Indonesia's Palm Oil Industry in Social, Economic and Global Environmental Issues, with the main goal of discussing important issues related to the Indonesian palm oil industry. Indonesia’s achievement in developing oil palm plantations has brought about a revolution in the world’s vegetable oil industry which, among other aspects, is demonstrated by its success in turning palm oil into the world's major vegetable oil, and the emergence of Indonesia as the largest producer of palm oil in the world. The palm oil revolution has led to unsavory practices among its competitors in the vegetable oil market such as raising social, health, economic and environmental concerns as themes in a negative/black campaign against palm oil. The issues contained in this book are presented with facts. In this case, invalid opinions, views, accusations and the like are exposed as myths to readers. This is the third edition of the book. The first edition was published in 2015 and the second edition in 2016. The two previous editions that have been reprinted several times have been published both domestically and abroad. The demand for the book is still growing among avariety of parties, especially people who closely monitor the national palm oil industry. As in previous years, PASPI has regularly held discussions/book reviews in academic forums attended by lecturers and students in various universities in Indonesia. In 2015, the first edition of the book was discussed and reviewed in academic forums held at the University of North Sumatra, the University of Riau, SriwijayaUniversity, the University of Palangka Raya, Mulawarman University, Hasanuddin University and the Bandung Institute of Technology. Meanwhile, in 2016 the second edition of the book was discussed and reviewed in academic forums held at the University of Indonesia, Gadjah Mada University, Syiah Kuala University, Tanjungpura University,the University of Jambi, the University of Bengkulu and Lambung Mangkurat University. A great deal of input was obtained from discussions at various other universities. The third edition of the book has undergone several changes with the addition of more materials. In addition to the improvement and updating of the data presented, it also includes input from the discussions and book reviews of the second edition in various universities. Data updates and substantial additions have been made in each chapter in the third edition. New material can be found in Chapters 7 and 9. The third edition also contains the Myths versus Facts of Nutrition and Healthiness of Palm Oil (Chapter 8), which in the previous edition was not included. We would like to express our gratitude and appreciation to academics and researchers who provided valuable research and insights in the first edition of the book. Prof. Dr. Erwin M.Harahap, Prof. Dr. Abdul Rauf, Prof. Dr.S.B.Simanjuntak (University of North Sumatra), Prof. Dr. Usman Pato, Prof. Dr. Almasdi Syahza, Prof. Dr.Hasan Basri Jumin (University of Riau), Prof. Dr. Andy Mulyana, Prof. Dr. Imron Zahri, Dr. Umar Harun (Sriwijaya University), Dr. Yusurum Jagau, Dr. Suharno, Dr. Masliani (University of Palangka Raya), Dr. Bernaulus Saragih, Dr. Zainuddin (Mulawarman University), Dr. EndahSulistyawati (Bandung Institute of Technology), Prof. Dr.Kaimuddin, Prof. Didi Rukmana (Hasanuddin University). We would also like to express our gratitude and appreciation to academics and researchers who took part in reviewing the second edition and provided invaluable input for the publication of the third edition: Prof. Dr. Emil Salim, Prof.Dr. Ari Kuncoro, Dr. Widyono Soetjipto, Ahmad Dermawan SP, MSc (University of Indonesia), Prof. Dr. Slamet Hartono, Prof. Dr.Azwar Maas, Dr.Jamhari (Gadjah Mada University), Prof. Dr. Zulkifli Alamsyah, Prof. Dr.Anis Tatik Maryati, Prof. Dr.Dompak Napitupulu (University of Jambi), Dr.Sofyan, Dr.Ashabul Anhar,Dr.Sugianto, Dr.Fazly Syam (Syiah Kuala University), Prof. Dr. Alnopri, Prof. Dr.Priyono Prawito, Dr.Mustafa Ramadon (University of Bengkulu), Dr.Hamdani, Dr.Gusti Rusmayadi, Dr.Taufik Hidayat (Lambung Mangkurat University), Dr.Iwan Sasli, Dr. Jajat Sudrajat, Dr.Adi Suyatno (Tanjungpura University), Prof. Dr. Afrizal MA, Dr. Ir. Ira Wahyuni Syarfi MSi, Prof. Dr. Ir Reni Mayerni MSi (Andalas University). And all lecturers and university students, local governments, leaders of oil palm farmers’ organizations and non-governmental organizations who attended the discussions and book reviews. As we have already mentioned in the previous edition of the book, we hope the third edition can be used as a reference material, and can help promote the Indonesian palm oil industry amid the growing misuse of social, economic and environmental issues by global vegetable oil competitors. The third edition of the book is still being discussed in various forums, both in universities and in the wider community. The results of these discussions and the updating of new data and empirical evidence will be used for the improvement of the next edition. Bogor, April 2017 Palm Oil Agribusiness Strategic Policy Institute Dr. Ir. Tungkot Sipayung Executive director FOREWORD Palm oil production is a strategic industry in the Indonesian economy both at present and in the future. It is called a strategic industry because of its considerable contribution to Indonesia’s non-oil and gas exports, employment creation, rural development and poverty reduction. In addition, the palm oil industry has also become an important part of Indonesia's energy-sovereignty system. Not many sectors of the economy, especially in the commodity sector in which its contribution to the economy is so large, is as inclusive and broad as the palm oil industry. In the last decade, various social, economic and environmental issues have been misused by anti-palm oil NGOs as the theme of a negative or black campaign against the Indonesian palm oil industry. If the campaigns are ignored, they will mislead many people. It could also harm the Indonesian palm oil industry. We, therefore, need to promote public education to correct themisleading perception of the palm oil industry in society. In relation to this, we welcome the Palm Oil Agribusiness Strategic Policy Institute’s (PASPI) initiative to prepare and publish The Myths Vs Facts of the Indonesian Palm Oil Industry in Social, Economic and Global Environmental Issues. The book is expected to address the myths ascribed to the Indonesian palm oil industry so far. In addition, this book is also expected to help inform and educate the public both at home and abroad about Indonesia’s palm oil industry. On behalf of the Supervisory Board of PASPI, I extend my appreciation to the PASPI team led by Dr.Tungkot Sipayung, the executive directorof PASPI, who has accomplished this difficult task. We hope PASPI will continue to produce the innovations needed to safeguard the Indonesian palm oil industry as contained in PASPI's vision and mission. Bogor, November 2015. Prof. Dr. Ir. Bungaran Saragih, MEc. Indonesian agriculture minister, 2000-2004, and chairman of the supervisory board of PASPI ====================================== Preface to the second edition At least 10,000 copies of the second edition of the book Myths Vs Facts of Indonesia's Palm Oil Industry in Social, Economic and Global Environment Issues have been printed and distributed both at home and abroad. Demand for the book is still growing from various circles, especially from the people who payclose attention to the national palm oil industry. The Palm Oil Agribusiness Strategic Policy Institute (PASPI) has also held discussions with students and lecturers in academic forumsat various universities in Indonesia such as the University of North Sumatra, the University of Riau, Sriwijaya University, Palangka Raya University, Mulawarman University, Hasanuddin University and the Bandung Institute of Technology. A lot of valuable input was obtained from the discussions / book reviews held at these universities. This second edition has undergone numerous improvements. In addition to the improvement and updating of data, the new material includes the results of discussions/book reviews of the first edition in these universities. Data updates and new material are found in each of the chapters in this second edition. Some of the additions and improvements in the second edition are found in Chapter 4: the Connection of Urban and Rural Economy and Oil Palm Plantations, the Connection between Oil Palm Plantation Expansion and National Rice Reduction; Chapter 5: the Correlation between the Economic Condition of Farmers, Fishermen and Breeders and those of the Communities Working in Oil Palm Plantations; Chapter 6: the Driver of Global Deforestation; Chapter 7: Indonesia's Palm Oil and Deforestation Expansion, Oil Palm Expansion and Biodiversity Conservation in Indonesia, Soil and Water Conservation and the Potency of Palm Oil to Become Second Generation Biofuel. We would like to express our gratitude and appreciation to the academics and researchers who have provided valuable input and insights during the book reviews:Prof.Dr.Erwin M.Harahap, Prof. Dr. Abdul Rauf, Prof.Dr.S.B.Simanjuntak (the University of North Sumatra), Prof. Dr. Usman Pato, Prof. Dr.Almasdi Syahza, Prof.Dr.Hasan Basri Jumin (the University of Riau), Prof. Dr. Andy Mulyana, Prof.Dr.Imron Zahri, Dr.Umar Harun (Sriwijaya University), Dr.Yusurum Jagau, Dr.Suharno, Dr.Masliani (Palangka Raya University), Dr. Bernaulus Saragih, Dr.Zulkarnain (Mulawarman University), Dr.Endah Sulistyawati(the Bandung Institute of Technology), Prof. Dr.Kaimuddin, Prof.Didi Rukmana (Hasanuddin University) and other students and lecturers of these universities.