Asian Agri’s One to One Commitment will see the company match each hectare of its own land with one hectare of land owned by smallholders by the end of 2018.
The company is forming partnerships encompassing 60,000 hectares of land under the government’s Plasma smallholder scheme, and another 40,000 hectares belonging to independent smallholders, making Asian Agri the first palm oil company in Indonesia with such a commitment.
Asian Agri already partners with Plasma smallholders owning more than 60,000 hectares of land, and independent smallholders owning 25,000 hectares, so around another 15,000 hectares of independent smallholder land is needed. By the end of 2018 the company aims to have partnerships accounting for a total of 100,000 hectares of smallholder land.
The One to One Commitment does much more than just ensure a reliable supply of palm oil. Smallholders represent 42% of oil palm plantations in Indonesia, but are responsible for just 37% of production. Not only is their productivity lower, but their understanding of the latest environmental and management best practices can be limited.
Members of the government’s Plasma scheme benefit from some assistance, but independent smallholders tend not to be part of any formal organization, meaning they often lack knowledge, and access to financing and modern equipment.
We began offering formal assistance to Plasma smallholders in 1987, and expanded the scheme in 2012 with a program called Independent Smallholder Assistance. Now we are extending that assistance even further, with the plan to help 40,000 hectares of independent smallholders in 2018 as part of the One to One Commitment.
Asian Agri plans to add another 20,000 hectares by 2020, bringing the total amount of land owned by smallholder partners to 120,000 hectares: 60,000 Plasma and 60,000 independent.
By helping smallholders increase the productivity of their land, Asian Agri is helping tens of thousands of families to raise their income and thereby their living standards. Providing better equipment and training also helps smallholders grow their crops in a more sustainable manner, benefitting the environment and aiding our traceability efforts.
Asian Agri has long been a pioneer in the palm oil industry. In 1986 the company was one of the first to take part in the Plasma scheme, which enlisted the private sector in helping create a new generation of independent smallholders. And in 1994 Asian Agri was the first palm oil company in Indonesia to formally ban the use of fire for land clearance.
The success stories of Asian Agri’s Plasma Core Partnership Scheme and Independent Smallholder Mentoring is documented in Indonesia’s Institute for Development of Economics and Finance’s (INDEF) book, titled Developing Smallholder Partnership: Lessons Learned from Asian Agri’s Smallholder Partnership Model. Read to find out how Asian Agri partners with smallholders.