Global demand for coconut-derived products, including coconut milk and virgin coconut oil (VCO), continues to increase. The export value of processed coconuts is predicted to surge significantly. Currently, the export value of raw coconuts is approximately IDR 26 trillion; however, with proper downstream processing and domestic utilization, the figure could potentially reach up to IDR 2,600 trillion. This leap in value presents a strategic momentum to strengthen the national agricultural economy. The government is urged to develop several programs to accelerate downstreaming.
“Programs to accelerate downstreaming must be implemented immediately. The potential is enormous. The coconut tree is known as the Tree of Life, as every part of the tree can be utilized,” said Professor Umar Santoso, a lecturer at the Faculty of Agricultural Technology, Universitas Gadjah Mada (FTP UGM), on Friday (Aug. 22).
Professor Santoso explained that downstreaming is not only about processing the main raw material but also about utilizing by-products that have not yet been fully optimized.
Main products, such as coconut oil and VCO, can still be further developed, for instance, through the oleochemical industry.
Additionally, coconut water, coir, shell, and testa (the seed coat) can be processed into value-added products.
This potential opens wide opportunities for creative industries and innovations based on local resources.
With proper utilization, downstreaming can become a driving force for farmers’ welfare.
“If these are processed into semi-finished or finished products and industrialized, they will certainly increase added value, which in turn boosts income for both industry and farmers,” he emphasized.
Although processing technology is already available, Professor Santoso believes the main challenge ahead lies in the sustainability of raw materials.
He emphasized that increasing cultivation through replanting programs at the on-farm level is crucial, particularly since domestic demand for fresh coconuts and coconut milk is also high, competing with export needs.
This situation calls for careful planning to ensure long-term production.
Without such measures, downstream risks are hampered by raw material shortages.
“The challenge ahead, I believe, is the sustainability of raw materials. Therefore, increasing production through replanting must become a priority,” Professor Santoso explained.
From an academic perspective, universities have a strategic role in supporting downstreaming.
Professor Santoso stated that UGM is ready to support research, innovation, and assistance for farmers and industries.
This is crucial to ensure that coconut development is not only short-term but also sustainable in the long term.
Collaboration among universities, government, and industry is key to the program’s success.
Student involvement in research and outreach activities can also have a direct impact on the communities they serve.
“The role of universities, including UGM, is very important in supporting the coconut revitalization program through research and mentoring,” he said.
Professor Santoso also highlighted the importance of farmers’ involvement in the coconut industry value chain.
According to him, large profits should not only benefit companies but also ensure that farmers are not left behind.
Farmers’ participation must be guaranteed from the outset to ensure their welfare is not overlooked.
A fair and transparent partnership model could be one solution.
“Farmers should also have shares or be included in the coconut industry business. Large companies should not profit while farmers receive nothing,” he stressed.
From a policy perspective, Professor Santoso underscored the need to optimize the roles of relevant ministries and strengthen existing industries.
Farmers’ aspirations must be heard to ensure that downstreaming policies truly prioritize their welfare.
The government is expected to remain consistently present in overseeing the program’s implementation.
This way, the benefits of downstreaming will not only concentrate in large industries but also spread across society.
“Empower the Ministry of Agriculture and the Ministry of Industry to strengthen the existing coconut industry, and do not forget to listen to farmers’ aspirations,” he added.
Concluding his remarks, Professor Santoso expressed high hopes for the future of coconut downstreaming.
He emphasized the importance of well-designed programs to ensure that coconuts become a source of prosperity for farmers, while simultaneously strengthening the national industry and maintaining a domestic supply.
Successful downstreaming would not only generate foreign exchange but also enhance Indonesia’s competitiveness in global markets.
“With synergy from all parties, the coconut tree can truly become a symbol of national welfare. We hope that the major downstreaming program for coconuts will succeed, increase farmers’ and industry income, generate foreign exchange, while still fulfilling domestic needs,” he concluded.
Author: Triya Andriyani
Post-editor: Lintang Andwyna
Illustration: Freepik