Oil palm attracts highest agricultural FDI share in 2015-21

Oil palm attracts highest agricultural FDI share in 2015-21

Minister of Investment and head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia. (ANTARA/HO-Biro Pers Sekret/Rusman/am.)

Jakarta (ANTARA) - Foreign direct investment (FDI) in the agriculture sector between 2015 and March, 2021 was dominated by investment in oil palm plantations, the Ministry of Investment / Investment Coordinating Board (BKPM) has said.

Foreign investment in food crops, plantations, and livestock came from Singapore (53.7 percent) and Malaysia (15.8 percent), Jumina Sinaga, head of the sub-directorate for agribusiness at the ministry, informed during a webinar on 'How foreign investment can advance Indonesian agriculture’, here on Friday.

"This is in accordance with investment in oil palm plantations, which mostly come from the two countries," he said.

FDI realization in agriculture during the period reached US$9.5 billion, accounting for around 5.2 percent of the country's total FDI (in Indonesian value).

Meanwhile, domestic investment (PMDN) reached Rp173.9 trillion, accounting for 9.1 percent of the total PMDN in Indonesia.

"The FDI investment projects in the agricultural sector are mostly in Kalimantan and Sumatra," Sinaga said.

During the webinar, associate researcher at the Center for Indonesian Policy Studies (CIPS), Donny Pasaribu, highlighted that almost all of the agricultural investment went into oil palm plantations during the period.

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"Not the other way around (which is) don't invest in palm oil. We, however, feel that other sectors also need encouragement and have further opportunities (to be developed through FDI)," he said.

He highlighted the importance of foreign investment in agriculture for increasing agricultural productivity to ensure food price affordability and better food quality.

Foreign investment is expected to bring advanced agricultural technology to Indonesia, help promote Indonesian agricultural products in international markets, and improve national agricultural productivity, he added. 

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