Oil Palm Replanting Program Increases Productivity

Press Release
Indonesian Palm Oil Association (IPOA)

Oil Palm Replanting Program increases Productivity

JAKARTA – The government will continually increase the realization of the smallholding replanting program (PSR) which is aimed to increase the productivity of smallholders. The PSR is also aimed to help smallholders in implementing the good practices of sustainable oil palm plantations based on the standards set in the Indonesian Sustainable Palm Oil (ISPO).

Addressing the virtual discussion of Indonesian Palm Oil Conference (IPOC) 2020 in Jakarta on Wednesday, the agriculture ministry’s Plantations Director General Kasdi Subagyono said that of the total 6.72 million hectares of plasma smallholdings, there are 2.8 million hectares that need replanting as their ages already over 25 years and also their seedlings were of bad quality.

“Through the replanting program, we will increase the productivity of the smallholders from the current average of around 3.6 – 4.0 tons of crude palm oil (CPO) per hectare per year to around 6.0 – 7.0 tons per hectare per year according to their potential standard,” said Kasdi.

He said that besides increasing the productivity and quality of fresh fruit bunches, the PSR program is also aimed to implement the good cultivation practices in order to meet the sustainability principles as required by the Indonesian Sustainable Palm Oil (ISPO) certification.

“The certification of ISPO is mandatory for all oil palm plantations (smallholders, state-owned plantations, private owned plantations). The smallholders are given a transition period of five years to meet the standard required by the ISPO. They will be also under the fostering and supervision program of the government to meet the requirements and to strengthen the institutions of smallholders and cooperatives. The fundings for smallholders are distributed  through the groups of smallholders or cooperatives and can be provided during the early period of ISPO certification,” the economic coordinating ministry’s Deputy in Charge of Food and Agribusiness Coordination Musdalifah Machmud said during the virtual discussion.

Musdalifah pointed out that in implementing the replanting program, the smallholders are also dealing with the problems of lands and administrative procedures. To help solve the problems, the government had issued the omnibus law on job creation which contains articles to support the smallholders in implementing the sustainability principles.

“The omnibus law on job creation has a special scheme to solve the land legality problems. If the oil palm plantations are stopped, the smallholders will turn to other commodities that will need opening of new land sites.  Therefore, we need to do the best we can to keep the independent smallholders to stay doing their oil plantation business, and increasing their quantity and quality without opening new lands,” said Musdalifah.

Responding to that, the Oil Palm Plantation Fund Management Board (BPDPKS) President Director Eddy Abdurrachman said that in 2021 his institution will allocate 5.0 percent of the palm oil export levies under its management  to help finance the process of ISPO certification for smallholders.

“The PSR fund has been continually rising. As of October 2020 the funding realization had reached Rp1,859.89 billion. The replanting program is also supported with the fostering program for smallholders, application of IT system, involvement of independent surveyors, coordination with local governments and partnerships with financial and banking institutions,” said Eddy.

He further said that by increasing oil palm productivity through the replanting program, the supply of CPO for the production of biofuel under the government’s mandatory program of B30 and B40 will be also secured.

He said that the realization of replanting program during the period of 2016 – 2020 reached a total 172,934 hectares of smallholders’ oil palm plantations, which involved 75,993 independent and plasma smallholders with a total replanting fund already distributed reached Rp4.5 trillion. He said that in the next three years, the government has targeted to replant a total 500,000 hectares of smallholders’ plantations.  (*)

Jakarta, 2 December 2020
Indonesian Palm Oil Association (IPOA)

For further information, please contact:

Tofan Mahdi
Head of Communication Division of IPOC 2020
Mail: [email protected]
Website: www.gapkiconference.org