The Palm Scribe

Shaping the Future with Palm Oil Smallholders

By empowering palm oil smallholders through partnership, large palm oil plantation companies will be able to increase their supply of fruit bunches without having to resort to the expansion of their plantation, a company executive said.


Fadhil Hasan, Director for Corporate Affairs of Asian Agri, talking at a national informal discussion on palm oil held at the IPB International Convention Center here on March 14m, 2018, said that from early on his company already had a commitment to create partnership with palm oil smallholders, and was now even stepping it up and empowering it further.

He said that Asian Agri has around 100,000 hectares of plantation, 60,000 of which were plasma plantations.

“But we also engage in cooperation with smallholders who actually are not receiving any help, guidance from either the government or companies,” Hasan said, adding that up until now, the company has been providing guidance to independent smallholders who account for some 25,000 hectares.

“The target for 2018 is that we want to create a company that has 100,000 hectares of land but also has partnership and cooperation with 100,000 hectares belonging to palm oil smallholders,” he said. “Therefore, we are not expanding, but guiding farmers.”

With the partnership, the availability of raw material for the mill factory would be relatively assured, he said. Both the company and the farmers would be able to grow together through such a model of guidance in a partnership.

Hasan underlined the importance of providing this guidance and assistance to the smallholder as it will help them move towards a sustainable palm oil management, a model that was key to the creation of a sustainable national palm oil industry.

Fifty-eight percent of palm oil plantation in Indonesia, according to him, was in the hands of companies, which had access, the capability, the institutional or financial capacities to enable them to respond to the challenges in the palm oil sector. Meanwhile, the remaining 42 percent are in the hands of small farmers with plots of between two to five hectares and who faced constraints in cultivation techniques, organizational institutions, economy and many other aspects.

Hasan said that in order to get a sustainable palm oil industry that involves both companies and farmers, a key was through partnership, a pattern that actually had since early on been adopted by the government through programs such as core and plasm plantations.

“This model can encourage farmers to adopt and implement various demand of the world in general, linked to this sustainability issue,” he said.,

Hasan added that this partnership model needs to be built step by step as companies and the smallholders had different characters and also faced different constraints.


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