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Asian Agri disburses premium payments for smallholders in Jambi, Riau

Creative Desk (The Jakarta Post)
Jakarta
Mon, January 6, 2025

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Asian Agri disburses premium payments for smallholders in Jambi, Riau

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eading palm oil producer Asian Agri has expressed its appreciation for its smallholder scheme partners in Jambi and across Riau province by distributing premium payments from the sale of certified sustainable palm oil for 2023.

Premiums amounting to Rp 2.38 billion (US$146,183) were shared among 40 cooperatives (KUDs) comprising approximately more than 12,500 smallholders in Jambi. Meanwhile, the total premiums for Riau exceeded Rp 3.8 billion, which was shared among 38 KUDs representing approximately more than 15,000 smallholders.

The distribution ceremonies, which took place at the Grand Jatra Hotel in Pekanbaru, Riau on Dec. 12 and at EV Garden in Jambi on Dec. 20, highlight Asian Agri’s recognition of scheme smallholders who consistently adopt sustainable plantation practices in compliance with certification standards.

Asian Agri Regional Head for Jambi Ramli Simarmata said the program aims to reward oil palm smallholders who adhere to internationally recognized sustainability standards, namely the Roundtable on Sustainable Palm Oil (RSPO) certification.

“With RSPO certification, we can support the sustainable palm oil industry in international markets, particularly in Europe where only sustainably sourced palm oil is accepted,” he said, adding that the premium payments are aligned with Asian Agri’s 5C philosophy, which emphasizes that the company’s presence should bring value to the community, the country, the climate, the customer and ultimately the company.

Asian Agri Head of Partnership Rudy Rismanto said partnerships are a cornerstone of the company’s sustainability strategy.

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“Partnerships ensure a steady supply of raw materials for the company while significantly benefiting smallholders. Asian Agri supports smallholders by providing guidance to optimize plantation management and guaranteeing the purchase of their palm fruit, creating a win-win scenario for both parties,” he explained, reaffirming the company’s commitment to ensuring that the success achieved by the first generation of smallholders is sustained for future generations.

Welfare For All

Sudiyono, Chairperson of the Riau-based KUD Jaya Makmur, shared that his partnership with Asian Agri began in 1990 and is now entering its 35th year. Throughout this partnership, he and other smallholders have consistently received guidance on best practices in oil palm cultivation, enabling them to manage their plantations optimally.

“Asian Agri has also assisted us in completing all administrative requirements for certification. With this strong collaboration, we received our first premium sharing in 2013 and have continued to receive it annually,” he said, noting that the premiums are used to strengthen the group’s activities and prepare for alternative income sources during the oil palm replanting process.

Anton Suhartono, Secretary of KUD Sawit Subur in Riau and a second-generation scheme smallholder, highlighted the partnership’s benefits, including assistance with administrative processes in applying for funds from the Palm Oil Plantation Fund Management Agency (BPDPKS) and support in sustainable plantation management.

“We also have peace of mind in this partnership, as the company also acts as an avalist/guarantor for bank credit applications,” he explained.

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Sawit Sumay Makmur KUD Secretary Agustian in Jambi admitted that initially, the cooperative’s smallholders were unaware of the importance of RSPO certification. Asian Agri’s educational efforts and support, he said, allowed members to earn their certification, receiving their first premium payment in 2013.

“These funds have been invaluable, particularly for infrastructure improvements, such as maintaining 14 kilometers of roads, acquiring personal protective equipment (PPE) and renovating our office. We also received institutional strengthening training, including group dynamics.”

Irwan Ritonga, Chairperson of KUD Bukit Makmur and a first-generation scheme smallholder, expressed his gratitude for the partnership.

“During the first generation, the company provided technical assistance for sustainable plantation management. I am grateful for this partnership with Asian Agri, which has significantly improved my family’s economic condition. This has strengthened my resolve to continue the partnership with the company.”

Similarly, Jambi-based KUD Sawit Mulia Chairman Rahadi encouraged smallholders with unproductive plantations to proceed with replanting, noting the many advantages of the partnership model.

“Our decision to transition our first-generation plantations to the second generation was based on the success of our partnership with Asian Agri. The company helped us secure Rp 60 million per plot in funding from BPDPKS, acted as an avalist or guarantor for bank loans and even supported us in generating income during the replanting period through alternative livelihoods. With the support of our partners, the replanting process has been smooth and timely. I am confident that replanting through the partnership model is the best solution for smallholders,” he stated.

Optimizing Harvests

Asian Agri’s partner smallholders have also benefited from its superior Topaz seeds during the replanting period, which have proven to boost productivity to 28 tonnes per hectare by the third year of harvest. Initial harvests begin at 30 months, faster than other seeds which typically take about 36 months

According to KUD Sawit Subur’s Anton, the cooperative replanted 538 hectares in 2019, undertaking the second phase covering 144 hectares in 2024.

Anton expressed no concerns about losing income during the replanting period thanks to the support provided by both the government in the form of BPDPKS fund and Asian Agri through premium sharing funds allocated for alternative income preparations. The alternative income activities, which include organic free-range chicken farming, fish farming and crop cultivation, ensure smallholders have a stable stream of income during the waiting period.

Likewise, KUD Makmur Rezeki Supervisor Basuki emphasized the importance of using high-quality seeds as a key factor for successful replanting. As choosing the wrong seeds can lead to low productivity, he continued, the cooperative decided to use Topaz seeds after benchmarking against Asian Agri’s scheme partnership plantations in Riau.

“The results were impressive; even at the young plant stage (TM2), production reached 2.5 tonnes per hectare per month. Our partnership with Asian Agri has given us the confidence to enhance plantation productivity through high-quality seeds and sustainable practices,” he concluded.

Source : Asian Agri

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