OVERVIEW

The plantation industry[1] is a sector that broadly contributes to the development of a wide variety of social and economic aspects of Indonesia. The sector creates a multiplier effect to such things as land use, commodity production, foreign investment and employment opportunities. In 2013, 12  of the main corporations in the sector[2] utilized around 22,781,151 hectares of land,[3] involving more than 2,600 plantation companies.[4]

The importance of the sector goes further in its positive contribution to state revenue. In 2010 export activities from the sector amounted to USD 20 billion, of which USD 15.4 billion was sourced from palm oil exports.[5] In the plantation downstream chain, specifically from tobacco excise, the contribution amounted to IDR 63 trillion for the state budget[6] from the 290,000 hectares of tobacco plantations in Indonesia.[7]