InfoSAWIT, JAKARTA – Indonesian palm oil smallholders should play a larger role in agricultural value chains by participating in post-harvest processing rather than remaining suppliers of raw materials, according to sustainability researcher Katryn Pasaribu, Research Director at Kaleka.
Speaking during a recent webinar attended by InfoSAWIT, Katryn said smallholders currently occupy only the earliest stage of agricultural production, while most of the economic value is generated further downstream by processors, traders, and manufacturers.
"Smallholders often remain at the very beginning of the value chain," she said, explaining that this limits their ability to benefit from the higher margins created through processing and product development.
According to Katryn, access to basic processing activities—including drying, distillation, grading, or other post-harvest operations—would enable farmers to capture significantly greater value before their products reach industrial buyers.
She cited coffee as one example, where raw beans command relatively low prices but gain substantially higher value after undergoing drying, sorting, and preliminary processing. Similar opportunities exist across various agroforestry commodities, including products cultivated alongside oil palm.
To address this imbalance, Kaleka advocates developing community-based processing facilities, allowing farmers to market semi-processed products rather than raw agricultural commodities.
"The idea is early-stage manufacturing," Katryn explained. "The products are not yet finished goods, but they are much closer to the final market."
She also highlighted the close relationship between this approach and regenerative agroforestry, which integrates multiple crop species within a single landscape to improve biodiversity, soil fertility, and ecosystem resilience while generating higher-value agricultural products.
Katryn noted that regenerative farming aligns closely with Indonesia's 2025–2029 National Medium-Term Development Plan (RPJMN), particularly its priorities on food, water, and energy security.
However, she emphasized that achieving these objectives will require stronger collaboration among government agencies, farming communities, and organizations promoting sustainable agriculture.
According to Katryn, public policies should support regenerative farming initiatives, while successful field implementation can help accelerate the government's broader sustainable development agenda.
Ultimately, she argued, the future of Indonesian agriculture should not be measured solely by production volumes but also by how much economic value remains in the hands of smallholders.
"When farmers process part of their harvest themselves, they become active participants in the value chain rather than merely suppliers of raw materials," she concluded. (T2)
