Regulation of the Minister of Agriculture No. 33/Permentan/OT.140/7/2006 on guidelines for the development of plantations by means of Plantations Revitalization Program

2A GUIDES FOR PLANTATIONS DEVELOPMENT BY MEANS OF PlANTATIONS REVITAUZATION PROGRAM (Regulation of the Minister of Agriculture No. 33/Permentan/OT.140/7/2006 dated July 26, 2006) WITH THE GRACE OF THE ALMIGHTYGOD THE MINISTER OF AGRiCUlnJRE, Considering: a. that, in the framework of fostering growth of the real sector, especially to increase work opportuni ties, income,competitiveness, and national economic domination and regional development, it is neces saryto implement plantations development by means of Plantations Revitalization Program; b. that, in relation to the above matters, it is deemed neo:><;sary to stipulate guides for plantationr:; devel opment by means of Plantations Revitalization Pro gram by Regulation of the Minister of Agriculture; In view of: 1. Law No. 5/1960 on BasicAgrarian Laws (Statute Book of 1960 No. 104, Supplement to. Statute Book No. 2043); 2. Law No. 15/1997 on Transmigrations (Statute Book of 1997 No. 37, Supplement to Statute Book No. 3682); 3. Law No. 12/1992 on System of Cultivation of Plants (Statute Book of 1992 No. 46, Supplement to Stat ute Book No. 3478); 4. Law No. 18/2004 on Plantations (Statute Book of 2004 No. 85, Supplement to Statute Book No. 4411); 5. law No. 32/2004 on Regional Government (Statute • Book of 2004 No. 125, Supplement to statute BOol< No. 3839); 6. Government Regulation No. 25/2000 on Powers of the Government and the Province as Autonomous Region (Statute Book No. 54, Supplement to Statute Book No. 3952); 7. Presidential Decree No. 187/M/2004 onEstablishment of United Indonesia Cabinet; 8. Presidential Regulation No. 9/2005 on POSitions, Duties, Functions, Structures of Organization, and Work Procedures of State Ministries of the Republic of Indonesia as already amended by Presidential Regulation No. 62/2005; 9. Presidential Regulation No. 1O/2005'9n Organization .; Units and Duties of Echelons I of State Ministries of the Republic of Indonesia; 1O.Regulatlon of the Minister of Agriculture No. 299/ Kpts/OT.140/7/2005 on Structure of Organization and Work Procedure of the Ministry of Agriculture; l1.Regulation of the Minister of Agriculture No. 341/ Kpts/OT.140/9/200S on OrganIzation Units and Work Procedure o~ the Ministry of Agriculture; DECIDES: TOstipulate: REGULATION OF THE MINISTER OF AGRICULTURE ON GUIDES FOR PLANTATIONS DEVELOPMENT BY MEANS OF PLANTATIONSREVITAUZATION PROGRAM. CHAPTER I GENERAL PROVISIONS ArtiCle 1 Hereinafter rbferred to as: 1. Plantations Revitalization ~rogram is acceleration of development of small-scale plantations by means of expansion, rejuvenation, and rehabilitation of plan tations plants supported by investment credit and interest subsidy by the government with participa tion of companies undertaking plantation business as partners ill development of plantations, process ing and marketing of the outcomes. Business News 7454/27-12-2006 2. Expansion = .... 2. Expansion is development of plantations area in II newly opened area on unification of areas around plantations by application of advanced technology. 3. Rejuvenation is development of plantations by re placement ot old/unproductive plants With new plants, wholly or gradually. 4. Rehabilitation is development of plantation to rein state its productions potentialities by improvement of qualities of plants through improvement of mate rials of plants and maintenance conducted wholly or qradually. 5. Interest Subsidy ;s balance between commercial in terest and interest imposed on farmers and borne by the government to be paid to the bank in the frame work of Plantations Revitalization Program. 6. Business Partner is large private enterprise, state enterprise, regional enterprise, or cooperatives un dertaking plantations 'business in accordance with Plantations Business License (IUP) and or Industrial Business License and technical standards, 7. Participating farmer is planter as stipulated by the Regent/Mayor to receive Plantations Revltalization Program facilities. 8. Plantations Plants are oil palm, rubber, cocoa, and other plants stipulated by the Minister of Agriculture. Article 2 Plantations Revitalization Program is imple mented to expand, rejuvenate, and rehabilitate small scale plantations plants in newly developed areas or old areas by application of advanced technology so as to increase new work opportunities, productions and com petitiveness by creating cultivation system that integrates production, processing, and marketing of products. Article 3 (l)Plantations Revitalization Program is a package of plantations development policies that consists of; Business News 7454/27-12-2006 3A a, Basic components, which indude: 11) Expansion of small-scale plantations; 2) Rejuvenation, of small-scale plantations; 3) Rehabilitation of small-scale plantations. b. Complementary components, which include: 1) Processing unit; 2) Infrastructure; 3) Public means and facilities. (2)Theintegration of all of the components, as meant in paragraph (1), must be guaranteed, whether dur ing. preparations, implementation, completion, or further development stages. {3)Public means and facilities are utilized for public in terest in accordance with applicable laws. CHAPTER II ORGANIZATION Article 4 (l)The Director General of Plantations is in charge of operating plantations development by means of PJan tenons Revitalization Program lincooperation with and , I with the support of other related institutions. (2)The Plantations Revitalization Program is imple mented by: a. Companies that already have Plantations Business License OUP) and or Industrial Business License; b. Planters/cooperatives. (3)Coordination in development of Plantations Revital ization Program is implemented under supervision of: a. At central government level, Team for Coordi nation of Operation of Plantations Revitalization Program established by the Minister of Agricul ture; b. At provincial government level, Development of Operation of Plantations Revitalization Program is implemented byTeam for Development of Plan tations of the Province (TP3P) established by the Governor; C. At regental/muniCIpal level, Development of Ope ration of Plantations Revitalization Program is implemented by Team for Development of Plan tations of the Regency (TP3K) established by the Regent/Mayor. CHAPTER III BUSINESS PARTNER Article 5 (1) Business partners include large private enterprise, state enterprise, regional enterprise, or cooperatives undertaking plantations business and already have Plantations Business License (IUP) and or tnousmat Business License and already meet technical stan dards. (2)Business Partners already execute agreements with planters/syndicate of farmers/cooperatives acknow ledged by the Regent/Mayor. Article 6 (l}Business partner interested to take part in planta tions development by means of Plantations Revital ization Program files an application to the Regent/ Mayor c.q. the Regental/Municipal Plantations Agency with copies furnished to the Directorate General of Plantations and the Provincial Plantations Agency. (2)Conditions required from company that files an app lication to become business partner: a. Licenses and other legal documents for planta tions business; b. Having experience in plantations business; c. Guarantor; d. Having agreement with farmer/syndicate of farm ers/cooperatives; e. Partnership proposal in the framework of planta tions revitalization program. (3)A company that already fulfilled the conditions as meant in paragraph (2) above, is certified as busi ness partner by the Regent/Mayor c.q. the ReQental/ Municipal Plantations Agency, and copies of the cer Business News 7454/27-12":"2006 4A tificale are furnished to the Provincial Plantations Agency and the Directorate General of Plantations within not later than twelve (12) working days since receiving the application. (4) A company already certified as business partner, jointly with the Regental/Municipal Plantations Agency, arranges Annual Operational Plan to be used for submitting APBN/APBD proposal. Article 7 Obligations of Business Partner: a, To have plantations and processing unit thet eccom modates plantations products; b. To develop small-scale plantations based on opera tional guidelines and physical standards stipulated by the Ministry of Agriculture c.q. the Director Gen eral of Plantations; c. To ad as guarantor for securing credit facilitIY given for development of plantations; d. To include planters to actively participate in devel opment of plantations; e. To technically develop and manage planters so they are able to operate plantations, during development period or during planting period, to produce plants, and to support rejuvenation of plants; f. To buy plantations products at prices in accordance with applicable laws and/or agreement between bust ness partner and planters; g. To arrange operation and repayment of credit facili ties given to planters. CHAPTER IV PARTIOPATING FARMERS Article 8 (l)Farmers participating in Plantations Revitalization Program include; a. Planters whose plantations are rejuvenated and rehabilitated; b. Local society and others. (2) List of candidate planters is stlpulated by the Re gent/Mayor. (3) Planters . (3)Planters are given an opportunity to participate in development of plantations as workers. Article 9 Planter's obligations: a. To pay cost of development of plantations. In this case planters, directly or through cooperatives, are given investment credit by banks which is coordi nated by BRI; b. To cultivate their plantations in accordance wilh slan dards and guidelines set by business partner and/or institution for plantations affairs; c. To sell their plantations products to business partner at prices In accordance with applicable regulations and/or agreement between business partner and planters. Article 10 To foster and to strengthen sustainablllty of business partnership, participating farmers and or co operatives are given an opportunity to own part of shares of the business partner company. CHAPTER V AREA Article 11 (l)Size of area for each participating farmer is maxi mum 4 hectares. (2)Area for expansion is given to participating farmers under property right (hak milik). CHAPTER VI CREDIT Article 12 (l)Cost for development of plantations and/or process ing unit owned by business partner company is borne the business partner company. (2) Plantations Revitalization Program Credit is given and managed by the business partner company after being agreed by the Bank, and will be given to plant Business News 7454/27-12-2006 SA ers after the plants are technically worthy to be trans ferred. On development of plantations that not yet have a business partner, especially rubber and co coa, credit is given directly to planters. Arnde 13 Cost of development of small-scale plantations consists of: a. Cost of development of plantation from stage of de velopment of plants until transfer of plant including interest, which amount is calculated from unit cost plus management fee of ten percent(lO%), stipu lated each year' by the Minister of Finance c.q, the Director General of Plantations after considerinq the opinion of the Provincial Plantations Agency; b. Sourcesof fund from investment credit given by bank which is coordinated by Bank Rakyat Indonesia (BRI); c. Interest at ten percent (10%) during term of devel opment (maximumfive years for oil palm and cocoa, and seven years for rubber), and the interest rate balance is charged to government's account, after term of development it is imposed with commercial interest; d. Credit given to planters is protected and or guaran teed by the government. CHAPTER VII TRANSFER OF PLANTATIONS TO PLANTERS/COOPERATIVES Article 14 (l)Plantations are transferred to planters/cooperatives when plants already reach their productive age, based on types of plants and in accordance with physical standards stipulated by the Director General of Plan tations, and the planters/cooperatives already sign credit agreement with the bank. (2)Transfer, as meant in paragraph (1), is accompanied with delivery of land certificate to be kept by the Bank as collateral. Ar."., . Article 15 (l)ln the framework of development of plantation by means of Plantations Revitalization Program, Guide lines for Development of Plantations and Guidelines for Transfer of Plantations are stipulated by the Di rector General of Plantations. (2)The business partner company must continue to com ply with physical standards of development of plan tations. (3)Supervision over fulfillment of standards of devel opment of plantations is conducted each year by the Directorate General of Plantations without preju dice to his powers to issue reminder within the in terval of time of supervision if the standards are not fulfilled. (4)In case that Plantations Revitalization Program does not include business partner company, especially for cocoa and rubber, development of plantations is implemented by planters with technical guidance and supervision of the Regental/Municipal Plantations Agency. Article 16 (l)Evaluation into fulfillment of physical standards of development of plantations for transfer of planta tions is performed by an Independent COnsultant under supervision of the Directorate General of Plan tations. (2) Resultof evaluation for transfer of plantations is stipu lated by the DIrector General of Plantations. (3)If upon the date of transfer of plantations to farm ers, the physical standards are not fulfilled: a. The government may stipulate postponement of transfer/delivery of plantations to partlcipattnq farmers and the business partner company is obliged to improve the plantations at their own expense, and the proceed generated by the plan tations until date of transfer is deducted from to tal cost of development of plantations taken over by the Bank; Business News 7454}27-12-2006 6A b. Result of second physical evaluation into planta tions after improvements by business partner is final (Classes A and B). If the plantations are not classified as worthyto be transferred, the planta tions will still be transferred to planters with de grading of credit load. Balance of credit load is the responsibility of the business partner. (4) For development of plantations that do not have any business partners, particularly on cocoa and rubber, evaluation and snpuianon of result of final evalua tion are carried out by the Regental/Municipal Plan tations Agency. Article 17 If, due to a certain matter, upon the dete of transfer of plantations to farmers, plantations cannot be transferred, the business partner continues to culti vate the plantations and make records regarding pro ceed of the plantations, cost of exploitation, and obliga tions to the bank to be considered upon transfer. CHAPTER VIII OTHER PROVISIONS Article 18 Plantations development projects adopting part nership system, which have carried out development of small-scale/plasma plantations until the plants have not . generated first-year proceed (TBM 1), may be consid ered to be included in Plantations Revitalization Pro gram. CHAPTER IX CLOSING PROVISIONS Article 19 This Regulation comes into force since the date it is stipulated. Stipulated in Jakarta On July 26, 2006 THE MINIST~R OF AGRICULTURE Sgd ANTON APRIYANTONO ::::==(E)::::==