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Determination of Independent Farmers in Lampung, Manage Sustainable Palm Oil

Sumaji Pandu Alam (57) looks at the oil palm seedlings in his yard, for next year’s replanting . This is a type of marihat seed planted at a distance of 9×9 meters. The crown is smaller than the average palm which can reach 7-8 meters.

Sumaji is an independent oil palm smallholder and has partnered with a palm oil company in Tulang Bawang, Lampung. Regarding the plasma concept, he receives income at the end of each month, from cooperatives and companies.

Through KUD Krida Sejahtera’s Plasma Garden scheme with the company, the price of fresh fruit bunches (FFB) is relatively high. In contrast to the results of independent palm oil which is cheaper. The reason is less oil soaking so that the treatment is not maximized.

“The difference is Rp. 300-400 per kg of FFB,” said Sumaji, in Krida Sejahtera Village, Penawar Tama District, Tulang Bawang Regency, Lampung, Monday (24 October 2022).

Since working with plasma PT. Sumber Indah Perkasa (PT. SIP) in 1994, he got normal results in 2004.

Sumaji did not know exactly the Indonesian Sustainable Palm Oil (ISPO) certification system   . For him, income into the account every month, that’s all.

Sumaji, who is a village leader, explained that there are 36 villages in Tulang Bawang and Mesuji in partnership with the company. The area reaches 17,000 hectares.

“We authorize the funds to the village unit cooperative. The information has not been disbursed yet, for logging, buying seeds, and planting. As for the price of self-help palm oil, once in May 2022, it was IDR 300 per kg and then it went up again to IDR 1,200 per kg.”

For partners or company plasma, within the first five years of replanting , farmers are not allowed to plant intercrops. Usually, farmers can plant corn or cassava between the palms in the first three years.

But now during plasma, farmers can trick them by caring for livestock around the oil palm.

This was done by Restu Widodo (47), who herds goats and cows in an oil palm plantation. He and his wife are plasma partners of PT. OK. “The wife is shepherding this afternoon,” he said, met at his home last Sunday (October 23, 2022).

Handoyo, Coordinator of the Chairperson of Tri Tunggal Jaya Village Farmers Group (K3T), KUD Krida Sejahtera, said that after receiving RSPO (Roundtable on Sustainable Palm Oil) certification, farmers began to adapt to their surroundings.

Farmers are careful using pesticides. Oil palm plantations bordering protected forests, where there are still wild animals, when they are RSPO, they are not allowed to be hunted.

“Farmers may not kill snake pests using chemical pesticides. You have to protect biodiversity, especially those that are adjacent to Register 45 forests.”

Handoyo knows little about ISPO, which was filed through the village cooperative with the company. In 2020, partner companies and cooperatives will receive IPSO which is valid until 2025.

Ihwan Mulyanto, Coordinator of the Farmer Group Head of Karya Makmur Village, Penawar Aji District, Tulang Bawang, said that the company already had regulations regarding the concept of sustainable palm oil.

“Farmers are assisted with road maintenance, as well as labor,” he said.

Sudarsono, K3T of Panca Tritunggal Jaya Village, Gedung Aji Lama District, Tulang Bawang, Lampung said he was asked to fill out a questionnaire from an independent agency for an ISPO audit.

He supports ISPO from palm plasma. For him, when oil palm smallholders who partner with companies continue to be sustainable, the farmers’ income can also be sustainable so as to make farmers prosperous.

“What is clear, we meet the requirements. For example, regarding the environment, do not use herbicides. It doesn’t harm microorganisms,” he said.

“If exports go smoothly, farmers are also happy,” he added.

Even though they have received ISPO since 2020, he assesses that farmers are still not involved in determining the price of FFB in the province.

The FFB price in October 2022 is at a plasma level of IDR 2,146 per kg. In contrast to the price of independent palm FFB, which is only IDR 1,450-IDR 1,500 per kg.

“Farmers benefit from partners, relatively controlled prices,” he added.

Palm Oil Productivity in Lampung 2017-2021 g/ha)

Source: BPS Lampung

Prices are higher

The Head of the Production Department of the Lampung Plantation Service, Elya Rusmaini, said that his party supports ISPO in Lampung. Farmers who partner with companies and have agreements have a higher FFB value than freelancers .

“For freelance farmers it depends on the market and the quality of FFB,” he added.

According to him, his party is encouraging ISPO for companies and independent smallholders, but the Plantations Office does not facilitate the ISPO funding.

“Independent smallholders can go through partners or cooperatives. ISPO is a quality standard set by the Government of Indonesia so that (CPO) is recognized worldwide,” he said.

According to him, ISPO is nothing but a standardization of quality, which has many indicators, for example minimizing the use of pesticides.

Currently, subsidized fertilizer is only for the coffee, sugarcane and cocoa plantation sectors. Meanwhile, oil palm farmers do not receive subsidized fertilizers. Of course, this will affect income.

“The effect on farmers is that subsidized fertilizers are cheaper. Depends on availability and from the farmer. According to the selling price too, “he added.

According to him, the Lampung Regional Government will prepare a regional action plan (RAD) for sustainable palm oil in 2023.

Ronald E Butar-Butar, Sucofindo’s ISPO Leader said, Succofindo as an independent auditor agency helps with ISPO for palm oil in Indonesia.

Based on company and palm oil processing factory regulations, ISPO is mandatory until 2025. For this reason, his party is wasting human resources for oil palm auditors.

Auditors are tasked with auditing oil palm companies, smallholders around the company, plantation services, the environment, element funds, and others.

“Mandatory (ISPO) for companies, plantation factories,” he said, Thursday (3 November 2022).

Furthermore, independent smallholders are not required, but are allowed to apply for an ISPO.

In carrying out the ISPO audit, his party cooperated with the plantation service and the environmental service, then asked about land legality, job security, best practices , and so on.

According to him, if this is fulfilled by the company, then the company can get ISPO. For those who do not comply, there are sanctions ranging from administrative to downgrading the management of type, 4, 3, 2, 1 oil palm plantations and closure.

Member of DPRD Lampung, Syahlan Gratitude, assessed that proper, good governance needs to be reviewed by farmers.

“For example, crop yields have not been in favor of farmers, prices have fluctuated sharply, sometimes high and low. When the price is high, it’s OK for farmers, if it goes down, it’s certainly detrimental,” he said.

In his opinion, the district government needs to make regulations to stabilize prices.

“It needs good governance. Alignment has not been maximized on farmers. For example, palm oil is still fully dependent on stakeholders , big companies,” he added.

Furthermore, when production in Lampung fell while the central government prepared financial assistance for replanting , it is hoped that oil palm farmers will be able to reach this assistance.

“If farmers want to pay for replanting at this price, it seems difficult. Not all of the proceeds from the sale of this commodity are used for living, some are for the sustainability of palm oil, such as maintenance and so on,” he added.

ISPO Palm Oil Company Data in Lampung

  1. Sumber Indah Perkasa (son of Sinarmas Mesuji and Tuba)
  2. PT. New Tunas Lampung Tbk Lamteng
  3. PTPTN 7 Bekri Units
  4. PT. Agrobumi Mas Lampura and Way Kanan
  5. PTPTN 7 units Rejosari

Palm oil company data is being processed by ISPO in Lampung

  1. PT. Palm Lampung Persada (Right Way and Lampura)
  2. PT. Earth Symbol of Mighty Earth (Lamteng)
  3. PT. Tubaba Mandiri Honey Earth

Source: Plantation Service of Lampung Province

Don’t let ISPO be abused

Although many practices from the palm oil business have received ISPO, Irfan Trimursi, Director of Walhi Lampung, said that ISPO should not be misused. For example, there are companies that fail to get ISPO, but the CPO proceeds are forwarded to companies that already have ISPO. This clearly violates the concept of sustainable palm oil.

“There should be no washing of crude palm oil (CPO),” Ifran added.

Besides ISPO, there is also No Deforestation, No Peat And No Explotation (NDPE). Palm oil products do not come from forest conversion areas, not from peat ecosystem exploitation areas, and do not violate human rights (HAM).

In Irfan’s view, human rights violations in a broad perspective are such as not seizing land, not polluting the environment, palm oil workers are not from nursing mothers and children, and so on.

“From an economic point of view, 1-2 ha is very small. You can just eat, thank you,” he added.

Walhi noted that the total cultivation rights (HGU) for oil palm in Lampung reached 60 thousand hectares. Sumaji Pandu Alam, Ihwan Mulyanto, Sudarsono, and Restu Widodo are smallholders who enjoy some benefits from the oil palm HGU. They hope that palm oil can support their family’s needs to be prosperous.

Sale and purchase of palm oil plots

Not all farmers can maintain plasma palm plots.

Restu Widodo, said that there are farmers who sell plots of oil palm for various reasons such as the need for their children’s schooling, the need for life when the price of palm oil is low, to the need for children to get jobs.

“The money must be ready first, if someone wants to sell it, they can buy it immediately,” he said.

The system of buying and selling plots by giving plasma agreement notes from farmers and companies, to the next buyer. The document has been declared valid. Meanwhile, the new buyer’s account number will be recorded by the cooperative.

Fuad Abdulgani, Lampung University Academic, said that 20 percent of the HGU for oil palm plantations should be enjoyed by local residents. One of them, by becoming a plasma or company partner.

FFB Price Development Data in Lampung in 2022 (Rupiah)

(FFB plant age 10-20 years)


Source: Lampung Plantation Service

He reminded that based on the Regulation of the Minister of Agriculture No.26/Permentan/OT.140/2/2007 Concerning Guidelines for Plantation Business Licensing, it was explained that every plantation cultivation business with an area of ​​25 ha or more and having a plantation product processing unit, must have a business permit. plantation (IUP). It was also emphasized that there was an obligation for large private companies (PBS) to build community plasma partnership gardens, at least 20 percent of their land area.

According to him, the principle of justice must exist in the plasma pattern partnership gardens. This means that the people around the company must enjoy the presence of the palm oil company. Don’t let lots of palm oil plots be sold, so that ownership shifts to other people who are not residents around the palm oil company. Or, there are residents around the plasma who buy lots of plots of oil palm, resulting in social inequality.

According to Fuad, the rules from the government and stakeholders are good, whether ISPO or NDPE.

“Implementation in the field must be good,” he concluded.

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