Empowering Independent Smallholders: Exploring Alternative Income Sources

Palm Oil Magazine
Doc. Sawit Fest 2021 / Hendra

PALMOILMAGAZINE, JAKARTA – The notion of expanding palm oil plantations to enhance income has been set aside due to the decline in the price of crude palm oil (CPO). Smallholders are now compelled to explore alternative means of survival by fostering an independent economy.

In recent years, smallholders have encountered greater difficulty in anticipating economic trends, as prices have fluctuated between improvements and deteriorations, as witnessed in 2018 and 2019. The plummeting value of fresh fruit bunches discouraged them from harvesting their plantations.

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As a result, they are compelled to seek alternative approaches to sustain themselves and cultivate an independent economy. This could encompass non-oil business opportunities aimed at boosting productivity from their plantations. However, achieving this objective is complex due to the requirement for financial institutions to provide support through a credit system, which poses challenges for them.

Also Read : Doubling Smallholders’ Income: SRP Targets in Asian Agri’s Plasma Program

Bank is one of many financial institutions in Indonesia that may give fund credits. But it is difficult for the smallholders to get because in one side, they should give the guarantee (land certificates) to the bank while their certificates are in the company because they still have debts in their plasma plantations.

Then they consolidated their ideas from the bottom, collected their own capital. The goal is to make the place for the strong and independent economy and could support their innovation. They realized that the innovation is in their hand but it needs big capital.

The confused ones gathered and discussed their future in Village of Tanjung Benanak, Sub district of Merlung, District of Tanjung Jabung Barat in 2011. After having debates, they agreed to make gabungan kelompok petani (Gapoktan) which was initiated by five men. Gapoktan turns to be koperasi simpan pinjam (KSP). Until now it has 532 members in the transmigration villages,, such as, Tanjung Makmur, Bukit Harapan, Lampisi, Cinta Damai, and some members derive from the labors of PT Asian Agri and PT Seruni.

The main goal of the KSP is to bridge the smallholders to get financial helps and create the independent and better ones sustainably. To be the member, everyone should have the main safe about Rp 500.000 and the monthly safe about Rp 50.000


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