InfoSAWIT, JAKARTA – Partnerships between plantation companies and smallholders can extend beyond production support to include financing, cooperative governance and education. The experience of KUD Sadar Sejahtera in Musi Rawas, South Sumatra, illustrates how these elements can help strengthen the long-term sustainability of smallholder oil palm plantations.
Arman Fahmi, chairman of KUD Sadar Sejahtera in Beliti Jaya Village, said his cooperative’s experience had demonstrated the importance of collaboration. After previously participating in a plasma partnership, the cooperative operated independently before eventually rebuilding its relationship with a plantation company.
He said limited technical knowledge had made independent plantation management more challenging, reinforcing the value of cooperation in improving smallholders’ capabilities.
The cooperative is now preparing to participate in the Smallholder Palm Oil Replanting Programme (PSR) with Sinar Mas Agribusiness and Food. The programme covers 1,797 hectares and involves more than 2,000 independent smallholders.
Replanting Requires More Than New Seedlings
Indonesia’s PSR programme aims to help smallholders replace ageing oil palm trees with more productive, high-quality and sustainable planting material without opening additional land. Funding support is managed and distributed through the Plantation Fund Management Agency (BPDP).
However, replanting requires more than replacing old trees. Smallholders must also meet administrative and programme requirements and secure adequate financing.
Muhammad Iqbal, head of PSR at Sinar Mas Agribusiness and Food, said the company’s Centre of Excellence (CoE) PSR team assists cooperatives with programme applications, financing access and communication with banking institutions.
The initiative forms part of the company’s four smallholder partnership pillars: replanting, infrastructure and facilities, financing, and scholarships.
Iqbal said the programme also seeks to improve cooperative administration and governance, helping organisations become more financially credible and better positioned to access formal financing.
Agricultural Training and Fertiliser Support
Beyond replanting, the partnership provides regular technical guidance on Good Agricultural Practices (GAP), fertilisation, spraying and plantation management. Smallholders also gain access to certified Dami Mas planting material and support in following established operational standards.
In 2025, KUD Sadar Sejahtera secured fertiliser assistance under BPDP’s infrastructure and facilities programme for 138 smallholders managing 173.87 hectares. The fertiliser allocation was intended to meet requirements over two years and was delivered in kind.
The experience highlights how smallholder partnerships can connect productivity improvements with institutional development and access to essential inputs.
For Indonesia’s smallholder sector, such support can help address technical and financial barriers that often complicate replanting. Stronger cooperatives, better farming practices and more reliable access to financing are important elements in building productive and sustainable plantations. (T2)
