InfoSAWIT, JAKARTA – Indonesia's Smallholder Palm Oil Replanting Program (PSR) is becoming more than a mechanism for replacing aging oil palm trees. It is increasingly serving as a platform to improve productivity, strengthen farm governance, and enhance the long-term competitiveness of independent smallholders.
Through an integrated assistance program, Sinar Mas Agribusiness and Food is helping partner farmers gain access to government replanting funds, improve institutional capacity, meet sustainability standards, and expand opportunities in domestic and international markets.
Muhammad Iqbal, Head of Strategic PSR at Sinar Mas Agribusiness and Food, said the company actively assists smallholders in accessing PSR financing provided by Indonesia's Palm Oil Plantation Fund Management Agency (BPDP). The initiative supports the government's broader objectives of strengthening national food and energy security while increasing Indonesia's crude palm oil (CPO) production.
Beyond facilitating grant applications, the company also helps farmers strengthen their organizations and prepare for compliance with the Indonesia Sustainable Palm Oil (ISPO) certification scheme.
"This approach is designed to ensure that smallholders meet national sustainability standards while expanding their access to export markets and formal financing," Iqbal said in a statement received by InfoSAWIT on Tuesday (July 14, 2026).
He added that ISPO certification plays a vital role in promoting accountable plantation management, improving business transparency, strengthening legal certainty, and helping farmers mitigate operational challenges. The initiative is also aligned with the government's efforts to reinforce rural economic development through better governance of the palm oil sector.
As a technical partner in the PSR program, Sinar Mas Agribusiness and Food supports farmers from the earliest stages of implementation, including land readiness, institutional strengthening, technical cultivation practices, and assistance in securing complementary financing.
According to Iqbal, these activities are part of the company's Collective for Impact initiative, which promotes multi-stakeholder collaboration to improve both productivity and sustainability. The approach integrates legal compliance, financing access, and farmer capacity building to generate measurable outcomes while strengthening long-term partnerships throughout the palm oil supply chain.
From a productivity perspective, the replanting program enables farmers to replace aging trees with superior planting materials, including Dami Mas seeds, while adopting Good Agricultural Practices (GAP). Consistent technical guidance, he noted, is essential to ensuring sustainable productivity gains and better plantation management.
For plantations that have already entered their productive phase, the company also assists farmers in accessing government support programs that provide agricultural inputs and infrastructure. These include improved planting materials, fertilizers, pesticides, harvesting equipment, agricultural machinery for plantation maintenance, and supporting infrastructure such as farm roads and basic logistics facilities.
"We believe that smallholders are the foundation of a sustainable palm oil supply chain. Therefore, our commitment extends beyond improving productivity to strengthening trust and long-term partnerships through certification assistance and better agricultural practices," Iqbal said.
To facilitate participation in the PSR program, the company also supports administrative processes, verification, and farmer institutional development to ensure compliance with government requirements. In addition, Sinar Mas Agribusiness and Food assists farmers in preparing for ISPO certification.
To help secure complementary financing for replanting activities, the company works with financial institutions by improving farmers' documentation, organizational governance, and business feasibility. These efforts enhance farmers' bankability and increase their access to formal financing.
Iqbal emphasized that ISPO remains a key pillar in strengthening sustainable palm oil production while mitigating supply chain risks. Through technical and administrative assistance, the company aims not only to improve regulatory compliance but also to reinforce responsible sourcing practices, reduce supply chain risks, and build more credible long-term partnerships.
Beyond plantation development, Sinar Mas Agribusiness and Food is also investing in human capital by promoting the BPDP Palm Oil Scholarship Program among communities and farming families surrounding its operational areas.
Between 2024 and 2025, the company supported more than 1,000 applicants, with 191 participants successfully receiving BPDP scholarships. This year, the company aims to help 500 students secure the scholarship.
The assistance includes document preparation, administrative support, academic mentoring, and interview coaching throughout the selection process. The initiative is expected to broaden educational opportunities while preparing a new generation of skilled professionals to contribute to the sustainable development of Indonesia's palm oil industry. (T2)
