13 Oct 2017, in Palm Oil - The President of the Republic of Indonesia has inaugurated a program to replant 4,446 hectare of oil palm plantation for smallholder farmers in South Sumatra, part of the sustainable landscape project in Musi Banyuasin Regency where IDH is working with stakeholders in developing a Verified Sourcing Area.
The replanting program provides 2,032 farmers with free certified oil palm seedlings, land title certificates, and free maize seeds for intercropping, which is expected to provide alternative livelihoods during waiting period until the new oil palm trees become productive. The government expected the replanting program would boost efforts in poverty alleviation and income distribution.
“The new seedlings will potentially increase smallholder yield fourfold,” the President, cordially known as Jokowi, told more than 3,000 farmers attending the packed event on Friday in the middle of an aging oil palm plantation, ”but only if the trees are maintained accordingly.” Jokowi emphasized to the farmers that applying best practices would make it possible to multiply yield surpassing other countries. “Soon a similar program will be available for rubber, coffee, cocoa, and nutmeg,” he promised and added that yield of various commodities in Indonesia has been comparatively low because years of ignorance in improving farmer’s capacity in good agricultural practices and failure to replant aging trees in time.
Musi Banyuasin Regent Dody Reza Alex Noerdin in his remarks to the President said “this replanting program is a strategic step in the regency’s implementation of sustainable plantation principles, which would be environmentally friendly and socially responsible.”
IDH is working closely with the Musi Banyuasin stakeholders in developing a Verified Sourcing Area or VSA, which would eventually make different kind of commodities originated from the regency sustainability certified. “All farm plots replanted in the program will also be certified,” said Desi Kusumadewi, IDH’s Senior Landscape and Commodities Manager.
The VSA will include a Center of Excellence where farmers are provided with access to extension services, which other than provide smallholders with ways to improve productivity, but also zero burning land clearing techniques. Recently, a smaller neighboring group of farmers within the regency has been RSPO certified and its Certified Sustainable Palm Oil won an offtaking commitment from a Norwegian cooperative, Felleskjøpet Agri SA. The VSA is in accordance to the provincial Green Growth Plan.
“There are 11 million hectares of oil palm plantation in Indonesia, of which over 5 million hectares are smallholders’. Assuming half of the smallholders’ area are aging and would need replanting, without a good working financing model, the farmers would lose their income eventually, thus would seek alternative income from among other clearing new land by slash or burn or encroaching nearby forest cover. A failure to support these farmers would increase the risk of new deforestation of at least 2.5 million hectares,” said Desi.
IDH was invited to sit in a central government sanctioned replanting committee in early 2016 and was involved in the formulation and early set up for the eligibility of the 2,302 Musi Banyuasin farmers for the replanting program.
The government sponsored replanting program will cover about half of the four-year investment cost of US$4,000 per hectare. The remaining of cost will be covered by the farmers own savings and some loans from local banks.
The President reminded the farmers to be very careful with the loans, and to use them only for productive purposes, otherwise they might lose their land title to the banks. “I will return next year to check if this replanting program is actually taking place,” he promised, ”working with me means I will check your progress, and if you really taking care of your trees.”