23 Aug 2007
On the island of Sumatra, one of the main palm oil-growing islands in Indonesia, the world's second-largest producer after Malaysia, 52-year-old Minah salvages unspoilt fruit from partly rotten palm branch that have fallen to the ground.
The Indonesian mother of eight ekes out a living on a state-run palm oil plantation near her house by picking through fallen branches to extract fruit which she sells for 600 rupiah per kg (6 U.S. cents) to a middleman.
"The plantation doesn't mind as long as I don't touch bunches still on trees," said Minah, as flies and other insects perch on her hands, stained by the sticky brown juice that oozes from the fruit.
The sales net her around $1 to $2 per day.
"And people say palm oil is expensive," she remarks.
Almost half of
Poverty levels remain high despite a pledge by President Susilo Bambang Yudhoyono to tackle widespread poverty made worse by chronic unemployment and underemployment.
In Langkat, about 50 km (30 miles) west of
They work as illegal fruit collectors like Minah, small holders, drivers, middlemen and labourers for palm oil refiners.
HISTORIC PRICES, HIGH EXPORT TAXES
In nearby
The price has since dropped but is still within sight of the highs, helped by soaring demand for palm oil in manufactured foods as well as for new greener biodiesel made from palm oil.
Obtained by crushing palm oil fruit, the reddish-brown oil is also used in cookies, toothpaste and ice cream.
But back in
The plantation companies are enjoying a boom in commodity prices driven by strong demand from countries such as
The biodiesel frenzy has also sparked mergers and takeovers across the plantation sectors in
With little support from the government, some palm oil farmers have to cope with high prices of fertilizers and a lack of funds to maintain their plantations and boost output by replacing old, unproductive trees.
EXPORT TAX
"I can't rely on palm oil alone to survive, especially because the price of fertilizer is very high," said Juanda Peranginanginthe, a 25-year-old farmer who cultivates 70 palm oil trees inherited from his father.
Farmers bear the brunt of the increased excise tax because refiners now refuse to buy fresh fruit bunches without a discount, said Asmar Arsjad, head of the Indonesian Palm Oil Farmers Association, which represents 5 million smallholders.
Rusman Sihombing, a driver who has been working for a palm oil collector for five years, said he has to transport 5,000 kilograms of the fruit to break even due to the paltry fees he receives for hauling the crops to refiners.
"I am not sure if the increase in (palm oil) prices actually has an impact on people here," he said.
($1=9,310 rupiah)
($1=3.46 ringgit)
Source: reuters
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