Jakarta – Indonesia's parliament has approved a new Bill that would allow plantation companies to cultivate bigger areas in the hope of bringing higher foreign exchange earnings, the Agriculture Minister said yesterday.

Indonesia is one of the world's main producers of palm oil, cocoa, rubber and coffee.

The Bill would override a 2002 decree that limits a company to a plantation area of not more than 20,000ha in one province or 100,000ha throughout Indonesia, with the exception of sugar cane plantations.

For sugar cane, the maximum plantation area is 60,000ha a province or 150,000ha throughout the country. "This plantation Bill will be a benchmark for operational policy and legal certainty in the plantation sector," Agriculture Minister Bungaran Saragih said.

The new Bill states the maximum and minimum area of land for plantations will be determined by the Agriculture Minister, based on recommendations from provincial or municipal governments, in line with Indonesia's regional autonomy law.

Mr Saragih said the Bill should create a conducive climate for the plantation industry, and he hoped foreign exchange earnings from exports would be doubled in the coming years. Analysts said the Bill may hurt small-holders, who now own 78 per cent of plantation land, as they would not be able to compete with large companies.

However, Mr Saragih said that under the new Bill, plantation development should be focused on small-holders to help their performance stay in line with other private enterprises and state-run operations. Plantation cultivation stands at 17.71 million ha, with 17.5 million workers.