Smallholders Replanting Program (PSR): Beneficial and Pro-Oil Palm Farmers Programs
Smallholder oil palm plantations are recognized as having an important role in making Indonesia the largest palm oil producer and exporter in the world. However, Oil Palm Statistics show that the productivity of smallholder plantations is the lowest when compared to state and private plantations. If this condition is allowed to continue, the smallholder plantations will be left behind, less competitive, and their existence could be threatened.
Therefore, the Indonesian Government issued a program of Smallholder Oil Palm Plantation Replanting (Peremajaan Sawit Rakyat/PSR) to increase the productivity of smallholder plantations. This program is one of the shortcuts to boost the productivity of smallholder oil palm plantations, amidst the implementation of a moratorium, and a massive black campaign related to the issue of linking deforestation and oil palm plantations.
The PSR program turned out to be not just replanting old or low productivity of oil palm trees. Behind the goal of increasing the productivity of smallholder oil palm plantations, PSR also creates economic benefits that can be felt by farmers. Through an expert talk webinar organized by the Indonesian Oil Palm Research Institute/IOPRI (Pusat Penelitian Kelapa Sawit/PPKS), Rizki Amelia S.E., M.Si, one of IOPRI researchers, describes the economic benefits of PSR program.
First, the existence of PSR being one of the strategies in reducing the availability of palm oil stocks so that the price will tend to be stable and can even encourage an increase in prices at the smallholder level. Second, as discussed above, the existence of PSR can increase the productivity of oil palm plantations along with the increase in the composition of productive crops.
Third, implementing PSR can reduce FFB production costs. This happens because when the age of the oil palm trees is more than 25 years old, so the height of the plant will increase so that it cause high risk during harvesting activities and higher harvest costs. The impact of the high harvesting cost without being followed by an increase in production will reduce the smallholder’s profit.
Fourth, PSR can generate biomass potential. As we know, many smallholder farmers are reluctant to replanting their plants because during that period there is no income for them. However, oil palm smallholders can get revenue from biomass in the replanting process and polyculture in plantation during replanting period. Utilization of this biomass can be used as handicrafts from palm sticks, furniture, red palm sugar and others, which have high economic value that can be enjoyed by oil palm farmer.
Fifth, PSR can increase the farmer’s income. By carrying out and implementation of best management practices (BMP) will encourage increased productivity so that it will increase the income of smallholders.
Sixth, by implementing PSR, it will reduce the use of illegitimate palm oil seeds, because in the implementation of PSR, plants that are no longer productive will be replaced with superior seeds. It should be noted that the use of illegitimate seeds can reduce the potential for FFB production by up to 50%.
Seventh, it can support food security through the intercropping of oil palm plants with food crops such as upland rice, maize. Apart from cultivating food crop products, oil palm farmers can also intercept with horticultural crops such as shallots, watermelons, and others. By polyculture crops, it can be a source of income for oil palm farmers during the Immature Plants period.
Seeing the huge economic benefits obtained during the PSR compared that the realization of the PSR program, it is still far from the target that has been set. In 2020, for example, the realization of the PSR program only reached 94,033 hectares. This figure is still far from the target set by the government, which is 180 thousand hectares/year.
To accelerate the realization of the PSR, the government continues to issue innovations by provide facilities such as simplifying requirements from 8 conditions to 2 conditions, namely land legality and institution, increasing grant funds from IDR 25 million/hectare to IDR 30 million/hectare, as well as KUR Loan facilities that can be accessed by smallholder who take part in the PSR program to increase funds for plantation management after replanting.
However, behind the commitment of the Indonesian Government to encourage the realization of the PSR, there is still a very urgent problem to be resolved, namely land legality. The polemic of smallholder oil palm plantations is accused of being in a forest area so as today there has not been a solution and a way out, even though this land legality is the key to problems in the development of smallholder oil palm plantations both through the PSR program and ISPO certification. Therefore, resolving the problem of the legality of smallholder oil palm plantations is a big homework for the Indonesian government that must be resolved.
With the easier requirements given by the government to participate in the PSR program, the amount of economic benefits obtained and the solution of land legality problem faced by smallholder farmers, it is hoped that it will motivate them to increase the realization of this program. This means that smallholder oil palm plantations can continue to exist and participate in making the national palm oil industry stronger and more competitive in the global market.
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