PALMOILMAGAZINE, JAKARTA – The palm oil plantation industry, initially confined to a single province, has expanded its operations to encompass 24 provinces, with plantations spanning approximately 16,381 million hectares from an initial 261,000 hectares. Despite this growth, the industry faces a significant challenge in the form of declining production over the past four years, posing a serious threat that demands swift action to address.
A primary obstacle encountered by smallholders is the issue of low productivity. This stems from various factors, including the use of seeds from unofficial or counterfeit sources, inadequate implementation of good agricultural practices (GAP), and constraints related to limited human resources (HR) and institutional support.
Additionally, concerns are raised about plantations potentially encroaching into forest and peat regions, lacking crucial certifications such as sustainability and halal compliance, as well as essential cultivation documents like Indonesian Sustainable Palm Oil (ISPO). Urgent interventions are needed to counteract the decline in production and address these challenges effectively.
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To solve the issues, Mula Putera of Directorate of Palm Oil and Various Palm General Directorate of Plantation Ministry of Agriculture, said that it needs more harmonious partnership between regulation and planters. Some factors that made it were allocation and plasma plantations, decision to get candidates from the smallholders, and the lack of socialization.
“The solution was proposed by having socialization about related regulation and responsibility, transparency, evaluation in scale, coordination, reinforcing HR and smallholders’ institutions,” he said.
Mula also mentioned the supply chain would be complex and made the smallholders’ profit get decreased. The ideal is that independent smallholders should get partnership with palm oil plantation company without having long supply chain.
“Partnership between small, medium, and big businesses in palm oil sector is clearly regulated. But there are disharmonious implementations between regulation and implementation. That is why it needs development from medium and big businesses to small ones by noticing the profitable principles that need, reinforce, and deliver profits one to another,” Mula said.
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Chairman of Persatuan Organisasi Petani Sawit Indonesia (POPSI), Pahala Sibuea said to escalate smallholders’ competence and capability, it is acknowledged or not, it needs trainings, and information, and fund support to escalate their knowledge about good agricultural practices to realize sustainable palm oil.
He also told that HR development in palm oil sector would be the key to escalate their knowledge, skills, and competitiveness.
It should not be for smallholders only but also for labors in palm oil plantations. The labors should be managed well so that their rights would be accommodated with social and labor insurance.
“Education and trainings would make the plantation production and productivity increase. Palm oil industries would be sustainably cultivated from the upstream to downstream sectors. The goal is about to get productivity 30-40 tons of fresh fruit bunch (FFB) per hectare per year, the yield 23 – 25%, and high level – sustainability,” he said, as in the official statement to Palmoilmagazine.com, Friday (15/12/2023).
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Director of Finance, General, Compliance and Risk Management Palm Oil Plantation Fund Management Agency (PFMA), Zaid Burhan Ibrahim said that cultivation practices in smallholders’ level significantly shifted from the conventional methods to more modern ones. The smallholders tend to implement much better knowledge to escalate their efficiency and production results.
But it is important to integrate upstream and downstream sectors as the main focus in modern cultivation. By having research, infrastructures, and other activity, everything would support them to maximize their palm oil harvest. The products, such as, bulletproof clothing, batik, and other innovation from palm oil would significantly create additional values.
“Smallholders replanting program would be the main instrument to realize the smallholders’ welfare. With the target 180 thousand smallholders per year, the grant – Rp 30 million per hectare at the maximal 4 hectares, would significantly encourage financial support,” he said. (T2)
