Training palm oil smallholders to boost productivity & income, while improving sustainable practices

November 2024

Over 40% of Indonesia's palm oil is derived from smallholders, small-scale farmers who own less than 20 hectares of planted oil palm. Despite this significant contribution to the country's overall palm oil production, smallholders often lack the knowledge and technology to optimize the productivity of their land in a sustainable way. 

Musim Mas is one of Indonesia's largest producers and exporter of palm oil. Like Bunge, Musim Mas is committed to smallholders and both companies have robust sustainability policies, particularly in terms of No Deforestation, No Peat and No Exploitation (NDPE). That's why Bunge and Musim Mas have partnered in a long-term train-the-trainers project in Sambas in Indonesia's West Kalimantan Province. It aims to help smallholders increase the efficiency of their farms and relieve poverty.

Smallholders struggle with a lower yield compared to plantations

On average, smallholder farms are 40% less productive than large plantations. Whilst a smallholder produces about 15 tons of oil palm fruit per hectare per year, a bigger plantation can produce about 25 tons per hectare per year. To increase production and their income, smallholders often resort to ineffective agricultural measures. In some cases, they will expand their farm by clearing forested areas, which is detrimental to ecosystems and biodiversity. The challenges that many Smallholders meet are:

1. Lack of Good Agricultural Practices
2. Lack of financial literacy and business planning skills
3. Poor quality planting materials
4. Lack of access to finance
5. Lack of access to markets

Smallholders listening to presentations from Village Extension Officers (local agricultural governmental field experts)

Empowering farmers through knowledge on good agricultural practices

To teach smallholders to use their existing land more efficiently and to address the first three points listed above, the project supported by Bunge and Musim Mas trains so-called village extension officers in good agricultural practices. In turn, these village extension officers train smallholders in the knowledge and skills they have gained. 
For example, it has been observed that many smallholders have a habit to overuse fertilizers in an attempt to boost production. To demonstrate the ineffectiveness of this practice, village extension officers use relatable metaphors to explain why this habit should be abandoned. The mobile phone analogy explains that overcharging a phone won't increase its battery capacity beyond 100%. Therefore using more fertilizer than the plants can absorb will increase the costs, but without significantly impacting yields.   

Explaining Good Agricultural Practices in the field

Highlighting the business benefits

This approach is also used with other subjects covered by the training program in addition. These include 
• Responsible herbicide application: Ensuring environmental protection and worker safety.
• NDPE principles (No Deforestation, No Peat, No Exploitation): Underscoring the importance of ethical and environmentally sound land management.
• Composting palm fronds: Promoting efficient resource utilization and reducing reliance on external inputs.
• Maintaining clean farmland: Preventing disease and promoting healthy crop growth.
• Selecting high-quality seedlings: Emphasizing the importance of starting with robust planting materials for optimal yields.
• Finance and business administration: Equipping smallholders with the skills to manage their farms as sustainable businesses.

A shared commitment to a sustainable future

The project aims to train 150 village extension officers and reach 1,000 smallholders in 2024. With these targets on track, the initial two-year commitment by Bunge, matched by Musim Mas' long-term investment, lays the groundwork for a more sustainable palm oil industry in Indonesia. Both companies are dedicated to exploring further opportunities to engage with farmers and conserve forested land as the project evolves.

Visit the website of Musim Mas here