InfoSAWIT, MEDAN – Indonesia’s Smallholder Palm Oil Replanting Program (PSR) continues to face significant challenges in North Sumatra, where regulatory issues surrounding land legality remain the primary obstacle to achieving government replanting targets.
According to InfoSAWIT, citing Bisnis.com on Tuesday (August 4), data from the North Sumatra Agriculture and Food Security Agency show that PSR implementation has declined sharply over the past several years.
In 2021, technical recommendations were issued for 11,067 hectares out of a target of 14,500 hectares. The figure dropped dramatically in 2022 to only 1,396 hectares against a target of 10,500 hectares.
For 2026, the province has been assigned a replanting target of 5,750 hectares. However, by mid-year, only around 1,000 hectares had received technical recommendations.
Since the program was introduced in 2017, cumulative technical approvals have covered 33,472 hectares, a relatively small portion of North Sumatra’s estimated 497,000 hectares of smallholder oil palm plantations.
Tsarwah, Junior Environmental Impact Control Officer at the provincial Agriculture and Food Security Agency, explained that one of the biggest challenges stems from plantation areas that are still classified as forest land under the Ministry of Forestry’s database.
Although many of these plantations have been cultivated by local communities for years, their legal classification prevents them from meeting the administrative requirements necessary to participate in the government-funded replanting program.
In addition to land status issues, many smallholders still lack formal land ownership documents, further limiting their eligibility for PSR assistance.
Tsarwah also noted that the grant disbursement process remains lengthy, with applications, field verification, and funding approvals often taking several months or even years to complete.
The prolonged process has prompted some growers to replace oil palm with alternative crops capable of generating income more quickly, as plantations remain the primary source of household earnings.
If these constraints persist, interest in maintaining and expanding smallholder oil palm plantations could gradually decline despite Indonesia’s growing domestic demand for crude palm oil (CPO), particularly to support the nationwide B50 biodiesel mandate, which is expected to require an additional one million tonnes of CPO annually compared to the previous B40 program.
To improve implementation, the provincial government continues to strengthen farmer assistance through sustainable cultivation training and partnerships with plantation companies. Authorities are also encouraging growers to establish farmer groups and build stronger collaboration with the private sector to improve productivity and increase eligibility for future PSR funding.
The government hopes these measures will help secure the long-term sustainability of North Sumatra’s smallholder palm oil sector while supporting stable fresh fruit bunch (FFB) prices and national palm oil production. (T2)
