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Study on the Development of Smallholder Oil Palm Plantation Model (Independent Farmers and PIR) Using the Economic and Institutional Approach

Study on the Development of Smallholder Oil Palm Plantation Model (Independent Farmers and PIR) Using the Economic and Institutional Approach

Smallholder oil palm plantations in Indonesia are generally aged over 25 years, causing low productivity. Replanting is one alternative to overcome this problem. The purpose of this study were: 1) to identify aspects of Good Agricultural Practices, (2) and to analyze the economics of the replanting model, 3) to analyze the economic behavior of oil palm farmers, 3) to analyze farmers’ strategies for fulfilling replanting cost and livelihood sustainability during the replanting process and 4) to analyze alternative institutional models in replanting financing. The study was conducted in Riau and West Kalimantan provinces and the 75 respondents were purposively sampled and interviewed . Focus Group Discussion (FGD) was then conducted to augment information needed. The study applied Investment Feasibility Study and the Analytic Hierarchy Process (AHP). The study identified that the improvement of transporting fresh fruit bunches from field to plant and of biological pest control were recommended. The oil palm replanting method used by farmers was financially feasible. To finance replanting financing, government assistance was needed and also by borrowing and savings. Meanwhile, farmers conducted income-generating activities to finance their necessities during replanting period. The institutional model for oil palm replanting financing recommended includes companies being an avalist (Riau) and off taker (West Kalimantan).

Name of Client

Badan Pengelola Dana Perkebunan Kelapa Sawit (BPDPKS)

Key Person / Organized by

Dr. Ir. Anna Fariyanti, M.Si

Contact Person

email: intercafe_ipb@apps.ipb.ac.id, phone/fax: +62 251-8377896, +62 251-8348903