PALMOILMAGAZINE, BOGOR – Indonesia’s oil palm industry should prioritize increasing productivity on existing plantations rather than expanding cultivation into new areas if it aims to achieve long-term sustainable growth, according to Professor Hariyadi of IPB University.
Speaking during his inaugural professorial lecture, Professor Hariyadi introduced the concept of the “New Nexus,” an integrated framework that combines productivity, sustainability, and innovation to strengthen the future of Indonesia’s palm oil sector.
He argued that significant production gains remain possible because smallholder plantations continue to operate well below their potential.
“Smallholder plantations are still producing less than 60 percent of their potential. Expanding plantation areas should not be considered the primary solution as long as quality planting materials and proper fertilization remain inadequate,” Hariyadi said, as quoted by Palmoilmagazine.com from IPB University.
According to him, intensification offers a far more effective pathway for increasing national palm oil output while minimizing environmental impacts. Success, however, depends on the widespread adoption of high-quality certified planting materials, balanced crop nutrition, and modern cultivation technologies that enable higher yields without converting additional land.
Hariyadi stressed that implementing Good Agricultural Practices (GAP) should become the foundation of Indonesia’s productivity improvement strategy. Among the key principles is the “Five Rights” approach to fertilizer management—using the right fertilizer type, applying the correct dosage, placing nutrients in the appropriate location, timing applications properly, and adopting the most effective application methods.
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Beyond improving plantation productivity, Hariyadi emphasized that the New Nexus framework also embraces the principles of a circular economy to maximize value creation throughout the palm oil supply chain.
He explained that many by-products generated during palm oil processing—including oil palm fronds, empty fruit bunches (EFB), shells, fibers, and Palm Oil Mill Effluent (POME)—represent valuable resources that can be converted into renewable energy, organic fertilizers, or livestock feed rather than being treated as waste.
According to Hariyadi, utilizing these resources more efficiently would not only reduce environmental impacts but also improve operational efficiency and create additional revenue streams for the industry.
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However, he acknowledged that wider implementation of circular economy practices still faces several obstacles, including high upfront investment costs, limited technological capabilities, logistical constraints, underdeveloped downstream markets, regulatory challenges, and the need to strengthen smallholder capacity to adopt new technologies and innovations.
Concluding his address, Hariyadi said the future competitiveness of Indonesia’s palm oil industry will depend on a more integrated development model that goes beyond simply increasing production.
He noted that the New Nexus approach combines productivity enhancement with climate resilience, circular economy development, digital transformation, and stronger compliance with Environmental, Social, and Governance (ESG) standards, which are becoming increasingly important requirements in global markets.
According to Hariyadi, adopting this integrated strategy will enable Indonesia’s palm oil industry to remain competitive while responding to growing international expectations for sustainable agricultural production. (P2)
