The Palm Scribe

Palm Oil Company Helps South Sumatra Smallholders Obtain Bank Replanting Credits 

A palm oil company operating in South Sumatra has helped the Al Fa’iz Mandiri cooperative in Musi Rawas district to obtain more than Rp 150 billion in funding for replanting, including for the provision of seedlings, fertilizers and technical assistance for 1,315 hectares of oil palm plantation.

PT Djuanda Sawit Lestari, a subsidiary of Sinar Mas Agribusiness and Food, and the Al Fa’iz Mandiri cooperative, have signed a credit agreement with PT. Bank Rakyat Indonesia, Tbk (BRI) to that effect, allowing 420 independent smallholders in Musi Rawas to replant their oil palm plantations, Sinar Mas Agribusiness and Food said in a written statement sent to The Palm Scribe on Friday (11/9.)

“This partnership program to replant farmer’s oil palm, is hoped to be able to raise the productivity of their oil palm crop. So that, the welfare of the farmers and their families can become much better,” Sinar Mas Agribusiness and Food CEO for South Sumatra, Iswanto Nadjaja said of the strategic partnership in the statement.

The productivity of fresh fruit bunches of growers in South Sumatra has so far remained quite low, mostly below 15 tons per hectare per year, as many of the crops were already old and therefore, there was a need for a replanting. The smallholders, however, had limited access to replanting funding as well as to good oil palm agricultural practices.

Budhi Novianto, Executive Vice President Agrobusiness Division of  PT BRI (Persero)Tbk,  said that the credit agreement was a follow up of a Rp 1.75 trillion BRI facility for the replanting of around 14,745 hectares of plantation of independent and plasma scheme smallholders  that is to be disbursed in phases through the strategic partnership between Sinar Mas Agribusiness and Food and a number of cooperatives in three regions —  Pekanbaru, Medan, and Palembang.

“BRI participates in supporting the government program of replanting people’s oil palm plantation and act as a banking partner to channel credit facilities to smallholders, independent or of plasma schemes. It is hoped that this financing can boost the productivity of oil palm plantation and help empower people in the productive sector, “Novianto said.

The singing of the credit agreement was held in Jakarta on Thursday (10/9) between the representatives of the three parties. There was no further detail provided on the bank credit.

 Siti Marfuah, the chairperson of Al Fa’iz Mandiri cooperative expressed her gratefulness for the strategic partnership between her cooperative the company and the bank to help cooperative members obtain funding to replant their plantation.

“Besides that, the company is also assisting in the management of oil palm plantation through the provision of superior and certified seedlings and fertilizer, technical assistance in agronomy and in getting ISPO (Indonesian Sustainable Palm Oil) and RSPO (Roundtable on Sustainable Palm Oil) certification,” she said.

PT Djuanda Sawit Lestari operate one mill and two oil palm estate in Musi Rawas district covering a concession of 10,968.28 hectares. a document of the Roundtable On Sustainable Palm Oil (RSPO) showed.

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