SUSTAINABLE PALM OIL INDUSTRY DEVELOPMENT AND ITS IMPLICATIONS FOR POVERTY ALLEVIATION IN ACEH
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Abstract
This study analyzes the role of the palm oil industry in supporting sustainable development (SDGs) and poverty reduction efforts in Aceh, Indonesia, focusing on the sector's contribution and implemented government policies. Palm oil is an important commodity used in various products that significantly contribute to the Indonesian economy, reaching CPO production of 48.4 million tons in 2019. This industry has been proven to create income for communities in palm oil-producing areas, and palm oil plantations can increase farmers' incomes 5–10 times higher than non-palm oil farmers. Palm oil's contribution to the SDGs includes poverty alleviation (SDG-1), hunger reduction (SDG-2), clean energy (SDG-7), and decent work and economic growth (SDG-8). However, this industry also faces serious challenges, including land conflicts, deforestation, and other environmental impacts that risk biodiversity and climate change. Although Aceh has extensive palm oil plantations, poverty remains a major problem — Aceh Singkil, which has the largest plantations, is in fact the poorest district in Aceh. The Indonesian government has committed to sustainable development in the palm oil industry through regulations such as Presidential Regulation No. 44 of 2020 and the implementation of ISPO, RSPO, and ISCC certification. However, with ISPO certification reaching only approximately 35% by the end of 2023, this demonstrates the need for intensive efforts, as well as education and training for smallholder farmers. This study uses a literature review and analysis of data from the Central Statistics Agency (BPS) to identify the relationship between government policies, sustainable development, and poverty levels. While the palm oil industry has significant potential for poverty alleviation, success will depend heavily on effective policy implementation, sustainable practices, and equitable distribution of benefits to address existing social and environmental challenges
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