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Rejuvenation of Oil Palm Plantations Has Not Resolved Various Problems of Independent Smallholders in Landak

The pick up car traces the dirt road among the young palm trees. The road can only be one car. The four-wheeled vehicle stopped right next to a pile of fresh fruit bunches (FFB).

Yunus, an independent farmer from North Amboyo Village, Ngabang District, Landak, West Kalimantan, and a colleague got out of the car carrying dodos. With this harvesting tool, they put the FFB one by one in the back of the car.

“Yesterday the harvest, today the fruit is transported,” he said, last year.

Palm fruit is still relatively small. Weight about 3-4 kilograms. It’s the fruit of a three-year-old plant. Yunus’ oil palm plantation is the result of the people’s oil palm rejuvenation program (PSR).

Yunus said, in 2019 he heard that there was a smallholder oil palm rejuvenation program (PSR) from the government for old and no longer productive oil palm plantations. Because he felt the need, he also ventured to join the program.

He was one of the smallholders in Landak District who took part in PSR for the first time.

“My land that took part in the PSR was 1.9 hectares,” he said.

After waiting about three years, the plants began to bear fruit. The first time to harvest is around April 2022. There have been no harvests for several months because the fruit is still small so it is difficult for the factory to absorb. “Now the fruit is bigger.”

Another independent farmer, Oren, also started reaping the benefits of the PSR program three years ago. One plot of land or about 1.9 hectares produces 1.5 tons at a time.

Among the palm trees measuring more than one meter, there are several banana plants. This fruit plant is an intercropping that supports residents’ income while waiting for the oil palm to bear fruit. “Now there are only a few bananas left because the palm oil is getting higher,” said this resident of North Amboyo Village.

Ismail Lapan, Chair of the Titian Sejahtera Mandiri Producers Cooperative, said that more than half of the around 100 members of the cooperative participate in palm oil rejuvenation. Some of the land that took part in the first phase of rejuvenation has already started to harvest.

“One farmer on average (rejuvenated land) is one plot or around 1.8-2 hectares,” said this independent oil palm farmer.

Ismail said, most of the independent oil palm smallholders were ex-plasma of the state-owned company PTPN XIII. The struggle of independent farmers who participate in this program is not easy. They have no real examples and pictures of garden rejuvenation.

Farmers, he said, must give up oil palm plantations to be replaced with new plants, even though they risk losing their income for about three years. While waiting for the plants to grow and bear fruit, farmers also use the open land to plant various vegetables and fruit using an intercropping system.

“Some grow cucumbers, beans, sweet potatoes, bananas and vegetables. Some also grow sugarcane and corn. The results can later be sold back to meet daily needs, “he said.

Farmers also work on productive oil palm lands belonging to other farmers. They work odd jobs to meet their daily needs, apart from rejuvenating palm oil maintenance.

For the PSR program, farmers initially received an incentive of IDR 25 million per hectare. Most recently, the government through the Palm Oil Plantation Fund Management Agency (BPDPKS) increased the incentive amount to IDR 30 million per hectare. This nominal, said Ismail, is only sufficient until the planting stage, not enough for maintenance costs such as fertilizer.

This condition makes it difficult for farmers. Especially now, fertilizer prices have increased by two to three times. “Not to mention the road problems and damaged bridge culverts that make it difficult for us to bring fruit,” he said.

Landak, is the first district in West Kalimantan to run PSR since the beginning of this program.

Yulianus Edo Natalaga, Head of the Hedgehog Plantation Service, said that most of the PSR fields are starting to bear fruit.

Those participating in PSR, he said, were farmers who had received technical recommendations (rekomtek) in 2018 with a planting year of 2019. At least, there were four cooperatives with oil palm plantations that had harvested.

“Because it is still a new plant, production is around 500-750 kg per hectare. The FFB production really depends on the treatment.”

Edo said that the PSR submission process began in 2017. At the end of 2018, the Rekomtek issued 2,500 hectares. Even though the rekomtek has been issued, but in indirect implementation it can be executed quickly.

“The challenge in the process at that time was quite large. Because you could say the technical instructions were still groping at that time,” he said.

Data from the West Kalimantan Plantation and Livestock Service (Disbunnak) show that there are 72,806 hectares of old or damaged oil palm plantations. Muhammad Munsif, Head of the West Kalimantan Plantation and Plantation Agency, said he would continue to improve PSR achievements to encourage a sustainable palm oil industry.

According to him, various facilities were provided by the government to accelerate the realization of PSR. One of them is by issuing Regulation of the Minister of Agriculture Number 03/2022 concerning Development of Human Resources, Research and Development, Rejuvenation, and Oil Palm Plantation Facilities and Infrastructure.

“This regulation provides space for corporate collaboration through partnership channels.”

Through the partnership with this company, he is optimistic that PSR’s achievements will be more progressive. He also hopes that various obstacles can be overcome with this new rule.

Data from the West Kalimantan Disbunnak, rekomtek out of the Director General of Plantations from 2018-August 2022 totaling 16,674 hectares. In detail, in 2018-2021 respectively 2,867 hectares, 5,251 hectares, 6,247 hectares and 2,085 hectares. For 2022, as of August, 4,400 hectares of rekomtek were issued.

Various challenges

The challenges on the field are also not small. At the stage of knocking down plants (falling chipping ), for example, bringing in heavy equipment is not easy because the number is limited. The land to be cleared is also scattered at many points.

The scarcity of seeds has also been a problem until now. This seed problem is classic because even in normal conditions, farmers have to wait quite a long time. Moreover, with PSR, the seeds are more difficult.

“When the funds (for PSR) came in, then it went into the chipping phase and when it was finished the seeds were not ready. Finally there is a waiting time for planting. Some even waited for a year,” said Edo.

According to Edo, some farmers use this idle land to grow various types of crops. In 2019, they have a corn seed distribution program for farmers participating in the PSR program.

Not only corn, farmers independently took the initiative to plant various vegetables with the results to support their lost economy due to oil palm logging.

Muhammad Pramulya, Agriculture Lecturer at Tanjungpura University, said the process of planting and caring for new oil palm plants will affect the quality of the FFB yields. The ideal FFB weight for a three year old is around 3-5 kg.

“The fruit weighs five kilograms at best,” he said.

There are several factors that affect the weight and productivity of palm fruit, including seeds, fertilizers, and natural conditions.

Fertilizer, he said, has a big role in affecting crop quality. He said 70% of the cost of maintaining oil palm lies in fertilizer. Unfortunately, currently the price of fertilizer has increased and there are also many cheap fertilizers circulating with quality that are not guaranteed.

“Fertilizer really has to be a concern. Because the correlation between fertilizer and crop yields is very close.”

Likewise with natural factors that also have an influence on crop yields. According to Pramulya, the response to fertilizer and the influence of the season will be seen in the next two years. This factor cannot be controlled, but it can be minimized if handled properly.

Farmers, he said, need to make good water management, so that the plants do not have a shortage or excess of water.

Not absorbed by the factory?

When the PSR oil palm plantations began to harvest, a new problem arose, the offtaker mills did not absorb the harvest directly.

Rahian, a smallholder who participates in the PSR program sells FFB to collectors ( loading ramp ). He had no other choice because there was no nearby palm oil company (PKS) to buy the fruit.

Although, the price that must be received is lower when selling to PKS.

He said that the palm oil plantation of the residents of Amboyo Inti Village is quite far into the area with land. For the harvest, he said, transportation costs were needed which were not cheap. Not to mention the expensive price of fertilizer.

“The price of fertilizer is around IDR 300,000. In the past, it was only IDR 150,000.”

Ismail said the selling price at the loading ramp or collectors averaged Rp 1,600-1,700 per kg. The price had dropped below IDR 1,000 per kg during the CPO export ban some time ago.

According to Ismail, the cooperative has actually collaborated with PTPN XIII. Along the way, this state-owned company was unable to absorb the FFB of independent smallholders.

Currently, the cooperative is exploring partnerships with an ISPO-certified PKS in Ngabang. They received assistance to complete various requirements so that this cooperative would immediately receive ISPO certification.

“Now the documents are almost complete. This year, hopefully it can be submitted,” said Ismail .

Indra Rastandi, Chair of the Indonesian Palm Oil Farmers Association (Apkasindo) of West Kalimantan, said that farmer groups or cooperatives that have planted in PSR plantations are now facing the problem that FFB is not being absorbed directly into OPMs.

“Because once the FFB is sent, it is returned and finally sold to collectors.”

The farmer group that submitted the PSR program has actually completed the required documents, one of which must be an offtaker or PKS receiving FFB.

They hope that the government will find a solution to this problem, especially since the PSR program in West Kalimantan is still ongoing.

“Not to mention the following planting year, where do you want the FFB to be harvested by the farmers?”

Edo said that currently there is no formal cooperation between farmer groups or cooperatives participating in the PSR program and PKS.

“There is no official cooperation yet. The conditions that require PKS offtakers are actually conditions that were issued in 2020, before there were none,” he said.

According to Edo, the independent smallholders who were former PTPN XIII plasma farmers actually hoped that the state-owned BUMN would absorb their FFB. The problem is, the company is in trouble. “PTPN XIII is currently only absorbing core plants.”

Under these conditions, he said, the farmers also sold the FFB to collectors because they were the only ones who could absorb their palm oil. In the future, he said, it is necessary to encourage collectors to become part of the cooperative business.

“However, to fulfill one dump truck it needs 7-8 tons, farmers’ production is at most two tons. So that cooperatives that become collectors like this are needed.”

Currently, said Edo, there are eight PKS operating in Landak and two in the development process. The agency is currently collecting data on palm oil production in Landak to find out how much palm oil is supplied and the ability of the PKS to manage FFB. Moreover, it is believed that in the future the PSR program will increase palm oil production in the regency.

“We are currently organizing the data and asking them (PKS) to tidy up the raw material supply data.”

Achmad Surambo, Executive Director of Sawit Watch, said that PSR should go through simultaneous planning. Not only in the plant rejuvenation process, but also in marketing. Don’t let, he said, when the farmers are harvesting, their FFB is not absorbed due to inadequate factory capacity.

“The problem is if there are not enough factories, it can make the bargaining power of the farmers low so that prices are also not good,” he said.

In his opinion, the local government should have calculated the data and projections for the FFB production of the farmers and the ability of the surrounding PKS to process the fruit. This data can be used as a reference for making policies or plans for the development of oil palm plantations.

Regarding the lack of rejuvenation funds, he believes there needs to be government intervention in presenting the most suitable credit schemes for farmers through banks or other financial institutions. According to him, the current credit scheme does not accommodate the needs of farmers.

He also advised farmers to do gradual rejuvenation, aka not all old land to be cut down at once. It is a good idea to keep some of the plants until some of the replanted ones bear fruit so that the farmer does not lose all income.

“Mechanisms like this must also be considered by the government, so that this program can run well.”

For high fertilizer prices, he suggests farmers buy in large quantities through institutions such as cooperatives so they can get cheaper prices.

Fertilizer use can actually be planned beforehand. Another solution to overcome expensive fertilizer prices, he said, is to use organic fertilizers.

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