ISSUES AND
STRATEGIES FOR ACCELERATING THE IMPLEMENTATION OF
SUSTAINABLE
SMALLHOLDER OIL PALM REJUVENATION
PROGRAM IN INDONESIA
Pordamantra1, Tri
Yuliana Eka Sintha2, Tri Prajawahyudo3, Eti Dewi
Nopembereni4, Yuprin AD5, Trisna Anggreini6,
Fandi Karuniawan Putera Asiaka7,
Betrixia
Barbara8, Ellydia Ludang9
Universitas Palangka Raya, Kalimantan Tengah, Indonesia
[email protected]1, [email protected]2, [email protected]3, [email protected]4, [email protected]5, [email protected]6,� [email protected]7, [email protected]8, [email protected]9
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ABSTRACT
This research aims to analyze various literature
that discusses problems and strategies for accelerating the realization of the
national sustainable smallholder oil palm rejuvenation (PSR) program. The primary method used in this research is a literature study (desk
study). The results of the study show that there are several strategies that
the government must implement to accelerate the realization of the sustainable
PSR program in Indonesia. The strategies in question include mandatory ISPO
certification in 2025 (Indonesian Sustainable Palm Oil) for smallholder oil
palm plantations, increasing the resource capacity of smallholder oil palm
growers in implementing good agricultural practices (GAPs), providing access to
smallholder oil palm growers to production inputs, resolving legality issues.
Smallholders' land, encouraging land productivity and strengthening
smallholders in fulfilling ISPO certification requirements, strengthening the
institution of smallholders as a forum for smallholders to access government
programs, and encouraging entry into the palm oil (CPO) processing sector which
is an industrial raw material, and the government and related parties signed
PSR cooperation through partnerships.
Keywords: acceleration;
program realization; smallholder palm oil; sustainable.
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Corresponding
Author: Tri Yuliana Eka Sintha
E-mail: [email protected]
INTRODUCTION
The agricultural
sector has a strategic role in economic activities in Indonesia; this can be
seen from its contribution to Gross Domestic Product (GDP), which is quite
large, around 13.7% in 2020 or second only to the processing industry sector in
19.88%. One subsector that has quite enormous potential is the plantation
subsector. The contribution of the plantation sub-sector in 2020 is 3.63% of
the total Gross Domestic Product (GDP) and 26.50% of the agriculture, forestry,
and fisheries sectors or is the main priority for these sectors (Atikah et al., 2022).
One of the
plantation commodities that plays a significant role in economic activities in
Indonesia is palm oil. Palm oil can produce vegetable oil, which is much needed
by the industrial sector. Its characteristics of being resistant to oxidation
under high pressure and its ability to dissolve chemicals that are insoluble in
other solvents, as well as its high coating capacity, mean that palm oil can be
used for various purposes, including cooking oil, industrial oil, cosmetics,
and biodiesel fuel (Jim�nez-Carvelo et al., 2017).
Indonesia is the
largest palm oil-producing country in the world. It has great potential to
market palm oil and palm kernel in domestic and foreign markets. The high
demand for palm oil can be seen from the increase in public consumption in
domestic and foreign markets. Potential markets that will absorb the marketing
of palm oil (CPO) and palm kernel oil (PKO) are the fractionation/ramification
industry (especially the cooking oil industry), special fats (cocoa butter
substitute), margarine/shortening, oleochemicals, and bath soap.
Palm oil production
in Indonesia has the potential to produce local benefits if its development
follows sustainable management. These benefits include increasing income for
local communities, increasing government income, reducing poverty, and
rehabilitating natural resource management. The bright prospects for palm oil
commodities in the world vegetable oil trade motivate the Indonesian government
to encourage the development of oil palm plantation areas (Halimatussadiah et al., 2021).
The government's
efforts to increase the productivity of oil palm plantations through the
People's Palm Oil Rejuvenation (PSR) program, as well as maintaining the area
of oil palm plantations so they can be utilized optimally. The objectives of
rejuvenating smallholder oil palms are resolving the legality of land that is
in forest areas and does not yet have a certificate, increasing the
productivity of independent plantations, increasing the income of growers along
with increasing crop productivity, managing oil palms by best practices, and
using certified superior seeds.
Rejuvenation is
necessary and absolute now for smallholder oil palm plantations. Most
smallholder farmers experience difficulties, mainly because of the significant
costs involved and the loss of income when the plants still need to mature.
When rejuvenating, smallholders will lose much potential economic value because
the waiting time is relatively long for the oil palm to be produced again.
The PSR program has
contributed to the recovery of the national economy during the COVID-19
pandemic by absorbing much labor and turning the wheels of the economy or
creating a domino effect (multiplier effect). As the world's largest producer
and exporter of palm oil, Indonesia produced 47.18 million tons in 2020. Around
37.3 million tons of this was absorbed into the export market (foreign). This
export value indicates that palm oil is an essential commodity for the
Indonesian economy and plays a role in contributing the largest foreign
exchange to the country.
By data from the
Ministry of Economy, the target for implementing PSR for three years (2020 to
2022) is 540,000 ha or 180,000 ha per year, spread across 21 provinces and 108
districts/cities and the realization of distribution of PSR funds (from 2016 to
April 2021) is IDR 5.93 Trillion for 220,226 Ha of plantation land and involves
96,122 planters (Kurnianingrum et al., 2021). The obstacles to the participating program are that not
all planters can meet the requirements of the PSR program, not all smallholder
oil palm land meets legality criteria, requires a company (partner) as a
guarantor or valise, and collecting and verifying administrative documents
takes time.
The problem with
smallholder oil palm plantations is low productivity and lack of
competitiveness. The average productivity level of smallholder plantations in
2017 was 3.06 tons of CPO/ha; this figure is below the national average
productivity of 3.52 tons of CPO/ha. This condition becomes even more unequal
compared to the productivity of private plantations, which has reached 3.85
tonnes of CPO/ha. Government-owned plantations have reached 4 tonnes of CPO/ha (Purnomo, 2020). The low productivity of independent smallholders'
gardens has an impact on the income received by smallholders. Apart from that,
the status of ownership of plantation land still needs to be cleaned and clear,
both in terms of the legal status of ownership and land use. There is still a
disparity in palm oil productivity between smallholder plantations and large
plantations, both state and private companies. Therefore, the Indonesian
government, in particular, prioritizes implementing oil palm development
programs for smallholder plantations, even though this is challenging work and
requires quite a lot of money.
The problem is that
the productivity and sustainability of oil palm plantations on land owned by
independent smallholders in terms of fulfilling the supply of oil palm plants
will depend on people's plantations, the government through the BPDPKS (Palm et
al. Agency) is launching efforts to rejuvenate oil palm plants to support the
sustainability of palm oil downstream in the continuity of palm oil supply and
increasing palm oil productivity from independent smallholders. This activity
is expected to absorb labor, grow gross domestic product (GDP), reduce poverty
levels in Indonesia, and bring farmers into middle-class economic society (Saragih, 2017).
Based on the
problems faced regarding palm oil cultivation in Indonesia, it is urgent to
carry out this research to infer, compare, and review previous studies related
to efforts to accelerate the realization of the smallholder oil palm
rejuvenation program with various strategies. This research aims to determine
the problems and strategies for accelerating the realization of sustainable
smallholder oil palm rejuvenation programs in Indonesia. The
benefits of this research are to help identify the obstacles faced by oil palm
farmers in participating in the rejuvenation program. Additionally, this
research can also help identify environmentally friendly rejuvenation
practices, thereby reducing negative impacts on the environment, including
deforestation, land degradation, and other issues related to oil palm
cultivation. Furthermore, the benefits of this research include raising public
awareness of issues related to oil palm, including its environmental and social
impacts. This can encourage more positive actions from the public in supporting
sustainable oil palm cultivation.
METHOD
The method used in
this research is qualitative. The aim of using a qualitative approach is in the
form of descriptions explaining several concepts related to understanding
"the understanding, background and in-depth objectives of a phenomenon,
facts and reality (Raco, 2018). The data type used is secondary or bibliographic data
sourced from various relevant materials, including books, scientific journals,
previous research, regulations/legislation, official reports, the internet, and
government agencies or institutions related to this study. The data collection
method is a literature study. The data is compiled and analyzed to obtain
conclusions regarding problems and strategies for accelerating the realization
of Indonesia's national sustainable smallholder oil palm rejuvenation program.
RESULTS AND DISCUSSION
Palm Oil
Production and Productivity in Indonesia
Table 1 Palm
Oil Production in Central Provinces 2015-2020![]()
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|
Province |
|
|
Production (Tons) |
|
|
Average |
Contri bution |
|
|
|
2015 |
2016 |
2017 |
2018 |
2019*) |
2020**) |
|
% |
|
Riau |
8,059,846 |
7,668,081 |
8,113,852 |
8,496,029 |
9,127,612 |
9,775,672 |
8,540,182 |
21.47 |
|
Central Kalimantan |
3,572,982 |
4,260,093 |
5,778,611 |
7,230,094 |
7,748,444 |
8,298,584 |
6,148,135 |
15.46 |
|
North Sumatra |
5,193,135 |
3,983,730 |
5,119,497 |
5,737,271 |
6,163,771 |
6,601,399 |
5,466,467 |
13.74 |
|
South Sumatra |
2,821,938 |
2,929,452 |
3,199,481 |
3,793,622 |
4,075,634 |
4,365,004 |
3,530,855 |
8.88 |
|
East Kalimantan |
1,586,624 |
2,358,392 |
2,840,710 |
3,786,477 |
4,044,753 |
4,331,930 |
3,158,148 |
7.94 |
|
West Kalimantan |
2,168,136 |
2,192,591 |
2,784,180 |
3,086,889 |
3,316,363 |
3,551,825 |
2,849,997 |
7.17 |
|
Jambi |
1,794,874 |
1,435,141 |
1,849,969 |
2,691,270 |
2,891,336 |
3,096,621 |
2,293,202 |
5.77 |
|
South Kalimantan |
1,049,463 |
1,750,389 |
1,933,721 |
1,464,227 |
1,556,612 |
1,667,132 |
1,570,257 |
3.95 |
|
West Sumatra |
926.618 |
1,183,058 |
1,302,952 |
1,248,269 |
1,298,038 |
1,390,199 |
1,224,856 |
3.08 |
|
Other |
3,896,397 |
3,970,034 |
5,042,253 |
5,349,484 |
5,638,558 |
6,038,894 |
4,989,270 |
12.54 |
|
TOTAL |
31,070,015 |
31,730,961 |
37,965,224 |
42,883,632 |
45,861,121 |
49,117,260 |
39,771,369 |
100.00 |
Information : *) Temporary Figures
**) Estimated Figures
����������� The
islands of Sumatra and Kalimantan are still the concentration of oil palm
plantations in Indonesia. Based on palm oil production data in Indonesia for
2015-2020, it shows that the most significant average production is in Riau
Province at 8,540,182 tons with a contribution of 21.47%, second is Central Kalimantan
Province with an average production of 6,148,135 tons with a contribution
amounting to 15.46% and third is North Sumatra Province with an average
production of 5,466,467 with a contribution of 13.74%.
����������� Meanwhile,
if we look at the productivity of oil palm plantations in Indonesia based on
CPO, the average is 3,974 kg/ha, where the highest productivity is in North
Sumatra Province, 4,760 kg/ha, the second highest productivity is in Central
Kalimantan Province, namely 4,576 kg/ha. Meanwhile, the third highest
productivity is Papua Province at 4,354 kg/ha (Rahayu, 2022).
Distribution
of Oil Palm Plantation Areas
The prospects for the development of the current palm
oil industry are very rapid, where there will be an increase in both area and
palm oil production in line with increasing community needs. (Syahza, 2019); (Sianipar, 2019); (Lee et al., 2020); (Zain et al., 2021); (Chiriac� et al., 2022). �In 2018, the area of oil palm plantations was
recorded at 14,326,350 hectares. Of this area, most of it is cultivated by
large private companies (PBS), namely 55.09% or an area of 7,892,706 hectares.
The coconut area in 2018 reached 3,417,951 hectares, around 99% or an area of
3,385,085 hectares. People's Plantations (PR) are in second place regarding
their contribution to the total area of Indonesian oil palm plantations, namely
5,818,888 hectares or 40.62%. At the same time, a small portion is cultivated
by State Plantations (PBN), namely 614,756 hectares or 4.29%.
Based on the exploitation status, the area of oil palm
plantations in 2020 shows that large private plantations (PBS) are more
extensive than community plantations, let alone large state plantations (PBN).
Large private plantations still dominate control of the area of oil palm
plantations. Of this area, the majority of 7.98 million hectares, or 54.69% of
oil palm plantations, are controlled by private plantations, followed by
smallholder plantations, which control 6.04 million hectares, or 41.44% of oil
palm plantations, and the remaining small portion of 0.57 million hectares or
3.87% is controlled by large state plantations (Rahayu, 2022) (Figure
1).

Figure 1
Comparison of the Area of Indonesian Palm Oil
Plantations according
to Business Status (Rahayu, 2022)
Factors That
Influence Palm Oil Production and Productivity
Several study results related to
factors that influence oil palm production and productivity in Indonesia
include the results of research where the findings show that the factors that
influence oil palm production are age or plant age, a significant positive rate
of plants at 37.90%. The outpouring of favorable employment rates was 66.00% (Alfayanti, 2013). Meanwhile, the
researchers found that the factors that influence smallholder oil palm
production using the self-help pattern are that the age of the plant has a
natural positive effect of 31.85%. The use of urea fertilizer has a natural
positive effect of 33.24 (Ariyanto
et al., 2017). From the results of these two
studies, there is a similarity that plant age is one of the variables or
factors that influence smallholder oil palm production and productivity.
Some of the challenges faced in
smallholder oil palm rejuvenation include independent smallholder land
certification, high capital requirements for oil palm rejuvenation, low farmer
competitiveness, and institutions that are not active in their function to
accommodate oil palm rejuvenation activities (Safriyana et al., 2019). Based on the t-test or t-test, only fertilizer, labor, and
pesticide variables influence production. The results simultaneously show that
the correlation coefficient value is 0.82. This indicates that the correlation
ratio with all independent variables (land area, fertilizer, pesticides, and
labor) is 82.1% (Arsyad & Maryam, 2017).
Relevant to determining the
optimal age for rejuvenation of oil palms, it indicates that oil palms that are
34 years old have entered the optimal age of rejuvenation and must be
immediately rejuvenated to maintain the sustainability of palm oil household
income. The government can provide support to encourage the acceleration of oil
palm rejuvenation in Paser Regency with a funding subsidy policy for
rejuvenation, such as in the Vegetable Energy Development and Plantation
Revitalization Credit (KPEN-RP) program so that it can open farmers' access to
external financing assistance (Mariyah et al., 2018).
The research results show that the
independent variables consisting of area, plant age, labor, and fertilizer
significantly influence the independent variables at a significance level of
99% (Manurung et al., 2019). The variables of area, labor, and fertilizer positively
influence the dependent variable or influence increasing oil palm FFB
production, and the plant age variable hurts oil palm FFB production.
The study results show that the
value of the assistance funds provided by the government in carrying out palm
oil rejuvenation has yet to be able to support the costs required (Siahaan et al., 2020). The percentage of farmers with a land area of 2 ha is 78.8%,
while those with a land area of 4 ha is 21.2%, the age of productive farmers is
68%, while the age of 32% is unproductive. Farmers with legal land are 36%, and
those without legal are 64%. This policy is not specific to location, as
evidenced by data from 282 farmers who are members of Gapoktan (a combination
of farmer groups); 16% have yet to be able to take advantage of this policy.
The costs required by farmers from the start of planting to the 3rd year
maintenance period are IDR 60,364,349.-. Through the indicative costs set by
the government at IDR 66,437,000, the difference in the average cost of
farmers' needs is smaller than that set by the government, namely IDR
6,072,651,- or 9.14%. Based on government assistance funds of IDR 25,000,000,
-/ha/farmer, to meet the costs of palm oil rejuvenation, farmers need matching
funds with an average value of IDR 35,364,349/ha/farmer or 59% of the total
funds.
An urgent problem that needs to be
addressed immediately is that the average age of oil palm plants has reached
over 30 years, so it is necessary to rejuvenate them immediately. Reactivating
farmer groups using Simluhtan (agricultural extension system) is also
essential. Reactivating farmer groups is a mandatory condition for obtaining
financial assistance from the government through BPDPKS (Palm et al. Agency)
because the condition for receiving financial assistance for rejuvenation from
the government is that farmers must be affiliated with farmer groups (Apriyanto et al., 2021). It was also found that oil palm production was based on
ownership in 2020, where large plantations were 32 million tons (66%), while
smallholder plantations were 16.3 million tons (34%). BPDKPS fund allocation
for July 2015-December 2021 for biofuel subsidies of IDR. One hundred ten
trillion (79.04%) for 2021 alone Rp. 51.86 trillion, while smallholder oil palm
rejuvenation (PSR) is only 6.6 trillion (4.73%); if you look closely at this
data, the subsidy for large plantations is more significant than for smallholder
oil palm plantations.
The research found that oil palm
farmers face several obstacles in rejuvenating old, damaged, and unproductive
oil palms, which can be overcome by utilizing rejuvenation funds provided by
BPDPKS, anticipating farmers' income loss during the rejuvenation process by
implementing an intercropping pattern, namely by utilizing land. Rejuvenating
palm oil by planting food crops such as upland rice and corn or horticultural
crops such as watermelon, cultivating citronella plants accompanied by a
distillation process, and cultivating livestock in the form of poultry or small
ruminants (Napitupulu & Fauzia, 2020).
On the other hand, researchers
found that some oil palm farmers still need more motivation to rejuvenate their
oil palms (Napitupulu & Fauzia, 2020). Apart from being triggered by the wages or rewards obtained not
being as expected, it is also due to the limited number of certified superior
seeds at very high prices and unaffordable for farmers.
Researchers found that the
fundamental problem faced by oil palm farmers in carrying out rejuvenation is
that farmers still have debts with banks, so land certificates, which are one
of the requirements for obtaining government funding support, are still being
held by banks, the high costs needed to carry out rejuvenation and loss of
income to meet the costs. The lives of farming families during the immature
crop period (TBM) and the total cost of replanting in the third year (Marlina, 2020).
Meanwhile, other researchers in
this study showed that the institutional principles of farmers still need to be
implemented. In contrast, 65.96% of the ISPO criteria still need to be
implemented. Only 34.04% of the ISPO criteria have been implemented by farmers.
At the same time, there are no farmer groups, data collection, and counseling
for farmer groups. Independently (Sabinus et al., 2021). The main problem that occurs in smallholder oil palm plantations
is low land productivity. The reason is that the ability of smallholder oil
palm growers to implement good agricultural practices (GAPs) needs to be
higher. Smallholder oil palm growers also have limited access to production
inputs, such as quality seeds, fertilizer, capital, etc. This is the leading
cause of low land productivity by smallholder oil palm plantations (SAPUTRA et al., 2022).
From various previous findings and
studies related to the factors that influence the production and productivity
of smallholder rubber plantations, many influencing factors are necessary to
accelerate the realization of a sustainable smallholder oil palm rejuvenation
program in Indonesia. These factors include the age of plants over 30 years
old, the amount of labor, the use of urea fertilizer, independent farmer land
certification, high capital requirements, low farmer competitiveness, farmer
institutions that are inactive in their functions, pesticides, and land area. ,
climate (rainfall), fertilization factors, number of trees erected per hectare,
farmers' groups are less active, farmers still have obligations or debts to
banks, large cost requirements, factors for theft of fresh fruit bunches, ISPO
criteria have not been implemented, there is no data collection and counseling
for farmer groups.
Strategic Efforts to Accelerate the Realization of the People's
Palm Oil Rejuvenation Program
By the problems, objectives, and
previous discussions. There are several appropriate strategic efforts in
developing the accelerated realization of the sustainable smallholder palm oil
rejuvenation program in Indonesia, which can be described as follows:
The government and palm oil
stakeholders must try to achieve the smallholder palm oil rejuvenation (PSR)
target in 2021. One of the efforts to accelerate the realization of this PSR is
by signing the Cooperation on Community Palm Oil Rejuvenation through
Partnerships. The Indonesian government is targeting 540,000 ha of palm oil
rejuvenation in 2020-2022. Signing of Cooperation for the implementation of PSR
between 6 member companies of the Indonesian Palm Oil Entrepreneurs Association
(GAPKI) and 1 State-Owned Company, namely PTPN VI with 18 KUD/Koperasi/Gapoktan
members of the Indonesian Palm Oil Farmers Association (APKASINDO) from 6
regencies, namely Kotabaru (Kalsel), Serdang Bedagai (North Sumatra), Muaro
Jambi and Merangin (Jambi), Kampar and Indragiri Hulu (Riau), with a total land
area in this PSR agreement of 18,821 hectares. This smallholder oil palm
rejuvenation program is the government's effort to increase the productivity of
smallholder oil palm plantations.
Sustainable
palm oil plantation certification continues to be promoted. Acceleration
efforts continue to be carried out, especially to encourage certification among
oil palm farmer groups. In the ten years since the application for sustainable
palm oil management certification (Indonesian et al./ISPO) has been operating
in Indonesia, approximately 755 certificates have been issued for private
plantations and PT Perkebunan Nusantara (PTPN) with a land area of 5.8 million
hectares out of a total of 9 .6 million hectares.
Currently, only 20 ISPO
certificates are issued to farmer groups, cooperatives, and village-owned
enterprises (Bumdes) with a land area of 12,600 hectares or only 0.18 percent
of the total existing land. Through the temporary ISPO commission in Minister of Agriculture
Regulation No. 30/2020, the Certification Institute carries out the government.
With the same principles and criteria as Minister of Agriculture Regulation No.
11/2015, 139 ISPO certificates have been achieved. Minister of Agriculture
Regulation No.38 of 2020. In this new Minister of Agriculture Regulation, the
Certification Institute (LS) is implemented in its entirety. From July 2020 to
August 2021, 139 certificates were successfully issued. The aim of the ISPO
certification system is contained in Presidential Decree No. 44 of 2020,
Article 3. First, guarantee and improve the management and development of Palm
Oil Plantations by the ISPO Principles and Criteria. Second, increasing the
smoothness and competitiveness of Indonesian palm oil plantation products in
both national and foreign markets.
In
developing the palm oil industry, it is necessary to develop professional human
resources competent in the palm oil plantation sector. The government is trying
to improve the quality of human resources through education, namely by
increasing the beneficiaries' knowledge, skills, attitudes, competence,
independence, and competitiveness. Expected. Vocational and academic higher
education scholarships Target: Planters, Farmer Families, and ASN in the Palm
Oil Sector. Not only through the education system, the government is also
trying through training channels to simultaneously increase competency levels,
which include Preparation and Socialization, Training, Mentoring, and
Assistance/Monitoring. Technical Training and Non-Technical Training
(Empowerment). Target: Planters, Farmer Families, Extension Workers, Supporting
Personnel, ASN, Communities around the plantation. This activity aims to
increase knowledge, skills, attitudes, competencies, independence, and
competitiveness and improve technical, managerial, and entrepreneurial
abilities through formal vocational higher education.
CONCLUSION
The challenges faced in expediting the smallholder oil
palm rejuvenation program are multifaceted, encompassing various factors such
as aging palm trees, labor shortages, suboptimal fertilizer use, limited land
certification, capital constraints, low farmer competitiveness, inactive farmer
institutions, environmental concerns, and inadequate support mechanisms.
Addressing these challenges necessitates a comprehensive approach that involves
implementing mandatory ISPO certification by 2025, enhancing resource capacity,
resolving land legality issues, strengthening farmer institutions, and
fostering collaboration between government and stakeholders. These strategies
are crucial in achieving sustainable smallholder oil palm rejuvenation and
overcoming the identified obstacles.
The strategy to accelerate the community's sustainable
palm oil rejuvenation program involves several key components. First, mandatory
ISPO certification by 2025 for smallholder oil palm plantations not only offers
economic benefits but also aligns with climate change conventions and
contributes positively to the Global SDGs. Second, enhancing the resource
capacity of smallholder oil palm growers through the adoption of Good
Agricultural Practices (GAPs) and facilitating access to crucial production
inputs like quality seeds, fertilizers, and capital. Third, addressing land
legality issues for smallholders to boost productivity and ensure compliance
with ISPO certification requirements. Fourth, strengthening the smallholder oil
palm growers' institutions as a platform for accessing government programs and
promoting participation in the palm oil processing sector (CPO). Lastly, the
collaboration between governments and stakeholders, as exemplified by the PSR
partnership, serves as a vital source of raw materials for the industry. These
strategies collectively aim to achieve sustainable palm oil rejuvenation within
the community.
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