Indonesia is taking a step forward to enhance the responsible production of its sustainable palm oil, through a collaboration between smallholder farmers and the private companies to adopt sustainable policy. The sustainable policy calls for a balancing act between the protection of biodiversity and economic development. 

The South-East Asian nation is the world’s largest palm oil producer with 45.8 million metric tons in 2019 and the biggest exporter with 36.18 million metric tons in the same year. Key to making the production more sustainable is the partnership between the public and private sector to support small holder farmers which form the backbone of the industry.

There are approximately 2.6 million smallholders working on 6 million hectares of palm oil nationally. They play a significant role in making this commodity as one of the best-performing export commodity  for non-oil and gas products in 2020, despite the COVID-induced economic downturn.

Palm oil has been in the spotlight for the past few years for its much-criticized environmental and social outcomes. Land extensification by illegal clearance, largely due to lack of awareness, has also impacted smallholders who rely on the commodity for their income.

Supporting the smallholders remains a challenge, due to the limited budgets and personnel. Nonetheless some  palm oil producing areas in the country have taken steps to address the issue, such as Pelalawan District in Riau. The district recorded 357,000 hectares of palm oil area managed by independent smallholders and produced at least 1.7 million metric ton, according to the latest figures by the local Pelalawan officials.

UNDP Indonesia, through the Sustainable Palm Oil Initiative (SPOI) and palm oil producer, Musim Mas Group have partnered to provide better capacity building on environmental protection and sustainability principles for independent smallholders. The partnership is part of broader objectives of  SPOI which advocates improved governance on the commodity production sector With operation in 13 countries, Musim Mas Group is of the leading global palm oil companies.  

Achievements

1,939 smallholder households have benefited from  the training in Good Agriculture Practice (GAP) using module developed by Musim Mas. GAP has  been utilized to intensify productivity through better nursery facilities, fertilization and daily maintenance.

“I was most interested the fertilization technique,” said Riwadi, among the participants in the GAP technique training program.  “But now I know better,” added the resident of Pangkalan Kuras sub district.

The project also facilitated the establishment of five demo plots— part of farmers’ land —as the smallholders learning laboratory.

The collaboration between the private sector and development agencies has had a positive impact beyond the field. Furthermore, the collaboration will also benefit the regional and local government to achieve their regional sustainability programme targets and action plan.

Over the past decade, more companies have been pursuing sustainability as part of their commitment to their client base and in response to the more progressive market. There is  much to be learned from private actors and their support for smallholders.

In future, the project aims to support the issuance of Cultivation Registration (Surat Tanda Daftar Budidaya /STD-B Perkebunan) for 287 farmers, facilitate the establishment of two smallholder associations and establish Internal Control System (ICS) for the association.

Further work will be done in terms of monitoring of trained farmers’ adaptation to GAP, trainings for sustainable certification, and continuous engagement, in collaboration with the government of Pelalawan to ensure transfer of knowledge and support.

The SPOI’s works is in line with SDG 12 on Responsible Consumption and Production.

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Media Contacts

Tomi Soetjipto, UNDP Indonesia Communication Specialist, suryo.tomi@undp.org

Ranjit Jose, UNDP Indonesia Communication and Advocacy Specialist, ranjit.jose@undp.org

Agus Hekso Proklamanto, Communication and Knowledge Exchange Officer for SPOI, agus.proklamanto@undp.org