3. Source : Oil World, LMC & Dept. of Agriculture, Indonesia
Indonesian Harvested Area and CPO Production
2
1
3 4
5
22.3
Mio T
Others
± 29 %
1. Riau
± 27 %
2. North
Sumatera
± 18 %
3. South
Sumatera
± 11 %
4. Central
Kalimantan
± 8 %
5. Jambi
± 7 %
Top 5 CPO Producing AreaOil palm cultivation in
Indonesia spread
across five main
islands. Sumatera is
the main planting
area for palm oil,
accounting for  70
percent of the total
planted area.
The majority of
plantations in
Sumatera are mature
and in peak
conditions.
Kalimantan, on the
other hand, is a
relatively new
destination for the
development of oil
palm plantations and
most plantations in
this island are still
immature.
Indonesia could increase its role as major supplier
Harvested Area :
9.7 Mio Ha
CPO Production :
44 Mio Ton
2020
Harvested Area :
5.73 Mio Ha
CPO Production :
22.3 Mio Ton
2010
HarvestedArea(MillionHa)
Production(MillionTon)50
40
30
20
10
0

4.  Employment
- Private and State Owned Plantation : 1.95 Million
- Small Holders : 1.75 Million
- Processing Industry : 0.10 Million
Total 3.80 Million
 Improved income for farmers / small holders with plantation ownership
of less than 2 hectares
 Generating export income of more than US$ 16 Billion
 Rural development specifically for the area outside Java island
 Significant contribution to government income from tax
Source : Indonesian Palm Oil Association (GAPKI) and Statistic Bureau of Indonesia (BPS)
Smallholders
38.3%
Private
53.77%
Government
7.93%
Planted Area, 2010
7.3
Mio Ha

5. Equivalent to RM650 – RM1,300 per month

6. Rural development in progress for quality of life

9. Planted area of oil palm
expected to increase to 5.48 Mn
Ha in 2015
Future progress in
mechanization in certain field
operations expected to
improve
Land to labour ratio assumed
constant due to area and rate of
mechanisation thus demand
for labour to increase to
547,893 in 2015
Year Area (ha)
Land Labour
Ratio
Labour
Requirement
2011 4,958,688 1:10 495,869
2012 5,090,764 1:10 509,706
2013 5,221,566 1:10 522,157
2014 5,350,989 1:10 535,099
2015 5,478,934 1:10 547,893
Source : MPOB – Palm Mech Seminar 2010

10. Year Planted Ha Harvested Ha
Workers
Employed
Land: Man
Ratio
2000 3,055,846 2,621,502 252,549 12
2001 3,155,670 2,663,610 265,182 12
2002 3,311,148 2,831,657 285,444 12
2003 3,414,042 2,915,909 314,658 11
2004 3,508,841 3,085,290 331,648 11
2005 3,626,801 3,212,804 329,709 11
2006 3,710,319 3,256,535 347,755 11
2007 3,834,758 3,320,100 509,831 8
2008 3,947,763 3,915,924 500,817 8
2009 4,082,124 3,477,438 502,229 8
2010 4,202,381 3,565,321 446,368 9
Source: Statistic Department

11. 51%
7.8%
17%
9.7%
Nepal~175,810
Myanmar ~ 140,260
Bangladesh~307,366
Indonesia ~ 917,932
India~113,797
6.3%
8.2%
Others~148,095
Source: Immigration Department

12. 2007 2008 2009 2010
Current Transfers
(MYR) Millions
16,035 17,490 19,631 21,831
Credit 1,348 1,414 3,714 1,855
Debit 17,383 18,904 23,345 23,686
RM 20.4 Billion
Remittances from Malaysia, 2009

13. Source: Department of Statistics, LFS (2004); EPU (2008); Narayanan (2007)
(Including plantation)

14. Creating modern methods – using technologies
Mechanisation – create modern jobs: machine
handler; fruits extractor; field officers etc
Recruit skill and knowledgeable workers –
certified by national occupational skill standards
(NOSS)
Integration of competent skill with technologies -
matched to increase productivity
Change of mindsets – top to bottom – all levels
Better salary packages with mechanisation

15. Total salaries &
wages
Basic salaries &
wages
Total salaries & wage including OT
payment
UPSR/UPS RA or equivalent 800 750 800
PMR/SRP/LCE 900 800 950
SPM/MCE 1200 1000 1200
STPM/HSC or equivalent 1568 1218 1597
Other Certificate 1500 1232 1515
Diploma 2355 2000 2400
Degree 3350 2905 3350
No Certificate 725 700 750
Source: Department Of Statistics
The Labour Force Survey, 2009
With minimum wage, labour cost will increase but will productivity increase as
well?

16. Source: Malaysian Economic Monitor Report April2012
Definition
Traditional Modern
Simple, routine and standardized tasks Complex, analytical and differentiated tasks
High supply of low-skill labor that can perform the
tasks with low wages
Tight supply of specialized labor and higher
productivity with improve salary packages
Most jobs in plantation & agriculture are labor-
intensive
Most jobs in knowledge intensive tasks across all
economic sectors
Strict labor regulations make it difficult to hire and fire
workers, effectively placing the burden of providing
income security on firms at the cost of lower efficiency
Flexible labor regulations reduce the cost of hiring and
firing and increase efficiency, while effective social
safety nets to protect workers
Rigid job structures and expectations that are not
conducive to the participation of large segments of the
population, especially women
Jobs that leverage on the entire stock of human capital
by making it easier and more attractive for women and
youth to join the work force
Competitiveness derived from institutions, security of
investments
Competitiveness derived from the quality of human
capital, in addition to good institutions

18. Harvesting
Collection
Skill Workers + Machines + System = Productivity + less Labour

19. Transportation
Collection

20. Compost and fertilizer
application
Local skill
workers are
operating these
machines and
systems
Proven mechanisation activities yielding higher productivity with significant labour
reduction by Sime Darby Plantations

21. Productivity between 15 – 20 ha per day

24. Some new technologies available for the industry

25. Concerted effort imperative from all parties within the
industry – developing the eco system
Changing mindset of local youths to attract them into
plantation – through regimented training and
“conditioning”
Introduce new position title to differentiate - low skill
foreign workers
New salary packages to commensurate with certified skill
workers
Government support through tax allowances for successful
implementation of mechanisation
Training centers must produce adequate skill and k-workers
to support industry requirement

26. Courtesy from PLASMA MPOB

27. Plantation must be geared into mechanisation
– implementation incentives and tax
allowances
Introduction of National Mechanisation Policy
- assure all plantation including smallholders –
optimize mechanisation
Recruitment of skill and competent k-workers
will propel the industry to greater heights