How Palm Oil Transformed this Family’s Economic Prospects

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Things were tough when Riaman Ilyanto moved from Java to Riau on the Indonesian island of Sumatra in 1997 to become an oil palm farmer and seek a better life for his family.

He sold his land and possessions and joined the government’s Plasma Transmigration Program, which encouraged migrants from other parts of the country to move to oil palm growing areas in a bid to expand the industry.

The move was inspired by a visit to his brother, who had joined the Plasma program a few years earlier. “I saw his life had been much better since moving to Riau,” said Riaman.

“I realized I was only a junior high school graduate: what happens if I stay in Surabaya with only a junior high school diploma? It would be difficult for me to make my family happy, so I decided to become a farmer,” he continued. “I sold my land to buy 2.5 hectares (ha) of oil palm plantation in Kerinci Kanan.”
One of Asian Agri's plasma smallholder who lives in Kerinci

When Riaman first arrived at his new home, the area was so remote it was overrun with animals – at one point his infant daughter was even chased by a wild boar.

That was not the end of the difficulties. As he struggled to get his plantation up and running, he had to seek additional sources of income. First he used his motorcycle to provide a taxi service, until he was able to afford a car and work as a delivery driver.

It was hard work, but Riaman was determined that his three children would have a better start in life than he had received.

“It was hard that my family and I have to stay in that condition, but whatever happened I was determined that I should make my family happy," he said. “The extra income was for them.”

As part of the government program, farmers were paired with palm oil companies who were charged with providing help and guidance. Riaman was partnered with Asian Agri, which also provided a guaranteed buyer for his produce, at a price determined by the government. Asian Agri's Smallholder discusses with Asian Agri's Estate Assistant

"Asian Agri was focused on the oil palm farmers who are transmigrating from Java to Riau. Starting from the provision of seeds, fertilization, oil palm treatment, until the harvest, we are always guided by Asian Agri," he said.

The partnership with Asian Agri has been key to the success of his oil palm plantation, which has now grown from the original 2.5ha to 27ha. Without such a strong partnership he may not have been able to improve his family’s situation so dramatically, he said.

And the improvement certainly has been dramatic. His income is now around IDR40-50 million per month, more than 40 times higher than the average income for non-palm oil farmers in Indonesia, according to figures from the Palm Oil Agribusiness Strategic Policy Institute.

His two eldest children are studying at university – a goal that would have been prohibitively expensive just a few years ago.

Andum, his second daughter, is studying at the Communication Department in the University of Riau. “A few years ago it would never have crossed my mind. At that time I can’t ask anything from my father because we sometimes didn’t have money for our daily meals," she said.

When she graduates she hopes to pursue a career in finance or public relations, and her younger brother hopes to follow in his siblings’ footsteps by attending university when he completes high school.

According to Riaman, education is very important for his children, because he wants his children to realise their full potential.

“I look at myself: I don’t want my children to be like me who only graduated from junior high school. They should be able get a decent education,” said Riaman.

"That’s why I am willing to struggle. The important thing is my children should be happy.”