With 27 oil palm estates in Riau, Jambi and North Sumatra totaling 160,000 hectares of land of which 60,000 are smallholder estates, Asian Agri together with its smallholder farmers represent...
Asian Agri will leverage collaborative action in the palm oil industry to play a part in the industry’s push towards better productivity and sustainability. This was shared by Asian Agri’s Managing Director Kelvin Tio at the Indonesia Pavilion at COP21 in Paris today.
Partnering more independent smallholders
Building on the success of its partnered plasma smallholders, the palm oil producer aims to partner more independent smallholders to help them improve productivity and income, while adopting sustainable and best management practices.
The “Independent Smallholder Assistance” Programme was launched in 2012. It started with a total partnered independent plantation area of 2,791ha. Today, the programme involves 5,000 smallholders managing a total plantation area of over 17,000ha.
Partnered independent smallholders will receive training and various forms of technical and non-technical assistance. This will raise standards to those of existing partnered smallholders.
Asian Agri will also help facilitate the formation of cooperatives to represent smallholders’ interests and needs.
The company aims to expand its “Independent Smallholder Assistance” Programme to cover 60,000ha in 2020 (more info). This will bring the combined plantation area managed by all partnered plasma and independent smallholders to 120,000ha.
Collaboration and shared value
As 50% of Asian Agri’s fresh fruit bunch supply comes from smallholders, both smallholder communities and company benefit from the creation of shared value via collaboration.
The knowledge and best practices gained by smallholders will raise yield improving productivity. This reduces the need for land expansion. The adoption of sustainable practices will have positive social and environmental impact, contributing to Indonesia’s efforts to reduce carbon emissions.
This company-smallholder partnership is a viable and proven business model for sustainability and growth, tapping on respective strengths and resources to benefit company, community and country.