Asian Agri’s Long Journey Partnering Smallholders at 4th Singapore Dialogue on Sustainable World Resources

At a standing room-only gathering of government leaders from Singapore, Indonesia and Malaysia as well as senior executives from banks, institutional investors, NGOs and the corporate sectors, Kelvin Tio, Managing Director of Asian Agri shared the palm oil company’s 30-year journey in working with smallholders and substantially raising their standards of living through the partnership.

Tracing Asian Agri’s roots to the 1980s when it was one of the pioneer supporters of the Indonesian government’s transmigration scheme to relocate citizens from the densely populated Java to under-populated islands such as Sumatra, Kalimantan, Sulawesi and others, Tio explained that the move was in-line with RGE Founder & Chairman Sukanto Tanoto‘s 4Cs principle, i.e. RGE companies must operate in a way that is Good for the Community, Good for the Country, Good for the Climate, and only then will it be Good for the Company.

Over the past three decades, Asian Agri grew its team on the ground to support its smallholder farmers to 200 strong. These Asian Agri employees work directly with smallholders–offering them the best seedlings, training them in sustainable planting methods, purchasing their yield at fair prices, and more–to achieve the best outcome in the partnership.

Tio further shared that having forged a strong partnership with plasma scheme smallholders, the company is looking at strengthening its engagement with independent smallholders, through an independent smallholder empowerment programme first piloted in 2012.

“We started from around 2,800 ha in 2012. By December 2016, the programme had grown to 24,500 ha,” said Tio. “Our target is to achieve 100,000 ha of smallholders partnership by 2018 of which 60,000 ha are scheme and 40,000 ha are independent. This will position Asian Agri as the only palm oil company with 1 to 1 smallholder partnership commitment.”

Concluding his remarks, Tio observed, “Supporting independent smallholders and improving their livelihood is the starting point of sustainability and certification.”

The 4th Singapore Dialogue on Sustainable World Resources was organized by the Singapore Institute of International Affairs. Mr Masagos Zulkifli, Minister for the Environment and Water Resources, Republic of Singapore delivered the morning keynote, while Dato Sri Dr Haji Wan Junaidi Bin Tuanku Jaafar, Minister of Natural Resources and Environment, Malaysia headlined the afternoon session. H.E. Alex Noerdin, Governor Government of South Sumatra Province, Indonesia, joined a panel discussion on how non-state actors can complement environmental governance.