Indonesian Oil Palm Research Institute

Edy Suprianto, Ambar Kurniawan, M. Akmal Agustira, Ratna Nurkhoiry, Suroso Rahutomo

• Indonesian oil palm smallholders development

• Problems on oil palm smallholders

• Planting material as a key factor

• Combating illegitimate oil palm seeds

• PROWITRA: IOPRI oil palm program for smallholders

2017 1995 1975 1985 1990 2000 2005 2010 2015

TIED: Smallholders

contracted to a plantation company

TIED+: Smallholders own

both tied & independent smallholdings

INDEPENDENT: Smallholders not

bound to a plantation company

320.607 ha NES I - VII

44.190 ha PIR-TRANS

200.465 ha KKPA

Revitalization 164.834 ha

State driven

Increasing role of private sectore

Decentralization

Private sector driven partnership models

Independent Plasma

Partial supported smallholders by

local agency

n.a

n.a

3 millions ha

Milestone of Indonesian oil palm smallholders development

Source: Molenaar, J. W. (2013). Diagnostic study on Indonesian oil palm smallholders. International Finance Corporation.

Source: Directorate General of Estate Crops (2016)

Oil Palm Area in Indonesia 11.6 Millions ha

Mapping Problems – Independent Smallholders

Low Yield Low Income

Not sustainable

Use of Illegitimate Planting Materials

Poor agronomic practices

Delay on replanting

Poor management of the smallholders’ institution

Misleading information about legitimate planting materials:

quality assurance, price, administration process,

Limited access to an information center

Limited information of best management practices

Limited access to production inputs

Limited access to financial sources

Limited credible advisors for the smallholders’

institutions

Limited funding to sustain income during replanting

Independent smallholders oil palm plantation can be easily recognized by unmanaged condition, nutrition deficiencies, use of illegitimate

materials, planting in unsuitable areas

Source: Purba et al. (2014)

Planting materials used

• 22% of farmers in Aceh, 28% in Bengkulu, and 63% in West Sumatera used illegitimate seed

• 68% of smallholders in Aceh were helped by government program which provided legitimate seedlings. While 49% of planters in Bengkulu gained legitimate seedlings from PT Agricinal as part of nucleous-plasma partnership with the company

Source: Purba et al. (2014)

Planting Material as Key Factor

Genetic –

Planting Materials

Climate

Rainfall Solar radiation Temperature

Agronomy Practices Fertilizer Plant Protection

Land Topography Drainage Fertility Soil structure Soil conservation

Harvesting Management Harvesting system Transportation Processing

Oil Palm Seed Production and Certification Flowchart

5 months

Controlled pollination

Seeds certification

Breeding Program

Seeds stock

Seedlings certification

3 months 1 week

3 months 9 – 21 months

15 – 20 years

QC QC QC QC

Pollen from selected Pisifera

Selected Dura as mother palm

QC

Seedlings certification

Seed garden designation

Assessment of variety

candidates by TP2V

Replanting, new planting, and oil palm seeds demand

Illegitimate seeds (‘False seeds’)

• The problems created by the extension of the market for illegitimate seeds became evident in 1997 during the previous oil palm boom in Indonesia (Baskett al., 2007).

• According to different sources, ‘false seeds’ planting material may be present in some 25% of the total area planted during the period 1997 – 2004 (Eko Basuki et al., 2005)

Various types of illegitimate oil palm seeds

Illegitimate oil palm seeds sold by online store

There is a wide variety of illegally produced, stolen, or mixed planting materials available on informal market

Illegitimate seeds are accompanied by fake documents

Reasons to use illegitimate seeds

Source: Agustira, MA (2016) Dampak kerugian ekonomi penggunaan bahan tanaman palsu kelapa sawit pada perkebunan rakyat (Studi kasus Kabupaten Siak Provinsi Riau)

Type of material

Origin of seeds

Losses due to D,T, or P type

Heterosis Inbreeding Potential

Commercial DxP

Seed producer 0 Yes 0 100

25% Dura 50% Tenera 25% Pisifera

Volunteer oil palm

- 32,25% No 75% (D+T)*40% 38.75

Expected value of illegitimate oil palm seeds

*Seedlings from DxP field are as a result of tenera*tenera pollination, will necessary include 25% of dura palms, 25% of pisifera palms and 50% of tenera palms.

Sources: Baskett, J. P. C., Jacquemard, J. C., Durand-Gasselin, T., Suryana, E., Zaelanie, H., & Dermawan, E. (2007). Planting material as key input for sustainable palm oil.

Yield profiles of legitimate and illegitimate seeds in oil palm smallholders (Case study on Siak – Riau Province)

Source: Agustira, MA (2016) Dampak kerugian ekonomi penggunaan bahan tanaman palsu kelapa sawit pada perkebunan rakyat (Studi kasus Kabupaten Siak Provinsi Riau)

Average cost (Rp/Ha) High quality oil palm seeds Illegitimate seeds

Planting materials 4,550,000 3,544,347 Investment 50,618,089 49,612,436 Maintenance cost (4-5 tahun) 8,461,143 7,761,143 Maintenance cost (6-8 tahun) 9,926,900 9,526,900 Maintenance cost (9-16 tahun) 9,288,135 8,788,135 Maintenance cost (>17 tahun) 5,789,830 5,639,830 Production cost per kg* 689.45 1,064.03 Profit per months/Ha* 1,341,514 503,895

Source: Agustira, MA (2016) Dampak kerugian ekonomi penggunaan bahan tanaman palsu kelapa sawit pada perkebunan rakyat (Studi kasus Kabupaten Siak Provinsi Riau)

Economic analysis

Combating illegitimate seeds

Seed Producers Regulator and Controlling Body

Law Enforcers

Quality Management System for seed production - traceability Seed tagging Specific and unique seeds packaging and supporting documents Education and mentoring for farmers about importance of high quality oil palm seeds Seed services in remote area

Controlling on seeds and seedlings distribution and growers (nurseries) Proper tools for quality control of oil palm seeds and seedlings purity Providing database of certified oil palm seed producers and certified nuseries in Indonesia that can be easily accessed

Law enforcement for the culprits of illegitimate seeds (includes non-official online stores and non-certified oil palm nurseries) UU Sistem Budidaya Tanaman No.12/1992 UU Perlindungan Varietas Tanaman No. 29/2000

PROWITRA by IOPRI

• Program Sawit untuk Rakyat. A project by IOPRI launched on 4th International Oil Palm Conference (IOPC) -- June 2010, Yogyakarta

• Aimed to assist smallholders in remote areas accessing information about high quality planting materials, best management practices, and sustainability of the industry

• Participatory rural appraisal approach guided by a researcher in charge (RIC) to identify specific problems in a specific region

• Activities include: (1) group discussion, (2) pilot project of BMPs in a selected village, (3) seeds mobile sales, (4) advisory for seeds franchising program.

Supporting documents for IOPRI oil palm seeds

8 provinces in Sumatra 4.396.748 seeds distributed 21.983 ha 3.404 farmers involved 1.292 seeds/farmer

PROWITRA 2011 - 2017

4.396.748 seeds

3.404 farmers

Systems Impact PROWITRA is in line with government program to empowering smallholders. PROWITRA is a media for sharing and connecting among IOPRI, smallholders, & local government. Site specific problems can be identified, and active participations of all stakeholders can be expected to solve the problems.

MySawit – Online seed sales

Dokter Sawit – Identification of pest and disease in oil palm

Mobile Applications

Closing remarks

• Planting materials is a key factor for improvement of oil palm smallholders productivity

• Education and dissemination about benefits for using of high quality oil palm seeds should be carried out in continual and systematic programs, in particular for independent smallholders

• Combating oil palm illegitimate seeds requires integrated approach involving seed producers, controlling body, and law enforcers

PROWITRA 2011-2017 Aceh

24

North Sumatera

8

West Sumatera

14

Riau

14

Jambi

15

Bengkulu

9 Lampung

2

South Sumatera & Bangka-Belitung

448,005

69,313

493,340

483,591

563,633

83,670

5,124

198,511 5

Number of visits

Distribution of high quality planting materials, equal to

90

2,364,753

3,410 Number of smallholders involved

11,823 Hectare of oil palm area covered

12.00

15.00

19.00

23.00

26.00 27.00

28.00 29.00

30.00 30.00 29.50

28.50

27.00 26.00

25.00 25.00

8.80

11.02

13.67

15.66

18.34

20.81 20.61 20.20

23.98 24.01 22.85

21.66

20.40

21.66 22.85

19.10

7.38 8.40

9.69 10.88

11.45 11.50 11.62 11.81 11.08

12.79 13.56

15.03 15.67

14.67

12.92 11.90

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4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Yie

ld G

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Yie

lds

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Age

Selisih Produktivitas standar Produktivitas Benih Unggul Benih Palsu Rata-Rata

Source: Agustira, MA (2016) Dampak kerugian ekonomi penggunaan bahan tanaman palsu kelapa sawit pada perkebunan rakyat (Studi kasus Kabupaten Siak Provinsi Riau)

Being cheated

Cheaper prices

Complicated requirements

Don’t know how to buy

Don’t know where to buy

Don’t understand the benefit

Seed producers are far