Plasma smallholders are farmers who took part in the Plasma Transmigration Program (Perkebunan Inti Rakyat, also known as PIR-Trans), set up by the Indonesian government in 1987.
Under the scheme, villagers from rural parts of Indonesia were relocated to oil palm growing areas and given two hectares (ha) of land to farm, as well as another 0.5 ha for their housing and food crops.
The plasma farmers were partnered with a local company which provided employment while the land was prepared, and after four years the oil palms were ready for harvesting.
The company provided technical support, while the plasma farmer agreed to sell his produce to the company at a price set by the government.
Asian Agri was one of the first companies which participated in the program. Today, it is partnered with 30,000 plasma smallholders who own 60,000 ha of oil palm plantations.
Besides ensuring a continuous and reliable supply of palm oil, the partnership sees Asian Agri help to improve the living standards of smallholder farmers by raising productivity of their plantations, thereby increasing their incomes.
Under the partnership, Asian Agri trains the plasma smallholders in managing their oil palm plantations in the most sustainable and productive ways, assisting them to acquire bank loans (used to start or run their farms) and also in repaying these debts.
Asian Agri provides its partner smallholders with the company’s own superior Topaz seeds (known to yield better harvests alongside other benefits) as well as with help finding alternative sources of income during the replanting phase of their oil palm plantations.
This is important because oil palms have to be replaced after 25 years, at the end of their useful life. Without Asian Agri’s reassurance and assistance, some smallholders may choose to delay replanting instead, resulting in declining yields and lower income from their ageing trees.
In addition, Asian Agri assists smallholders in obtaining RSPO (Roundtable on Sustainable Palm Oil) Certifications.
This RSPO certification allows palm oil farmers to a share of premiums (profits) from the sale of they produce, which Asian Agri distributes to its partner plasma smallholders on an annual basis.
Under the commitment, the company aims to match every hectare of its own land with one hectare of land owned by smallholders (totaling 100,000 hectares of smallholder land altogether) by the end of 2018.