As palm oil operations are labour intensive, and new developments are often in rural parts of Indonesia, we firmly believe that commercial palm oil cultivation is an effective solution for socio-economic development and poverty alleviation. We are committed to leading community growth in areas where we are operationally present.
Through our free, prior, and informed consent (FPIC) exercise carried out prior to new development, we are able to identify communities that are interested to partner with the Company in plantation development. As part of our commitment, we support both our plasma and independent smallholders. We work with the indigenous and local communities through plasma schemes partnerships whereby the company assists plasma farmers in developing and managing their plots until the oil palm trees reach productive ages. The plasma plots are then handed back to the plasma farmers who will sell their harvests from their plots to the company at government-determined prices. These partnerships provide sustainable incomes for thousands of smallholders, directly impacting local economic growth and living standards.
As at the end 2023, we managed 35,491 hectares of plasma smallholders, covering 20% of the total plantation area we managed, and 17% of the FFB we processed. Throughout these years, our field officers provided practical training, quality seed stock, advice on fertiliser and pesticide procurement and usage, exposure to new farming technologies, assistance with land titling and transportation of FFB to palm oil mills.
In addition to implementing best practices at our own nucleus estates, we are also committed to raising the sustainability standards of our plasma farmers, as smallholders account for more than 40% of Indonesia’s palm oil production.
As part of our sustainability policy, we will support smallholders by sharing sustainable best practices, providing technical assistance and including them in our Group’s supply chain.