An integrated palm oil company Musim Mas Group, the Livelihoods Fund for Family Farming (L3F), SNV Indonesia, and World Agroforestry (ICRAF) are collaborating on the Biodiverse & Inclusive Palm Oil Supply Chain (BIPOSC) project to enhance the knowledge and capabilities of independent oil palm smallholders in Indonesia.
Launched in 2021 in Labuhanbatu, North Sumatra, Indonesia, the BIPOSC project promotes sustainable practices through regenerative agriculture to ensure the long-term viability of the palm oil sector. Musim Mas, SNV, and APSKS LB presented the results of this three-year initiative at a press conference in Jakarta, yesterday.
Long-Term Vision for Sustainability of BIPOSC
BIPOSC Project addresses the pressing need for a deforestation-free supply chain, while also focusing on regenerating degraded land and restoring local biodiversity. By implementing regenerative agriculture, locally adapted agroforestry models, capacity-building for sustainable businesses, and others the initiative aims to not only improve the livelihoods of smallholder farmers but also to promote practices that benefit the environment.
Prior to the BIPOSC project, many independent palm oil farmers in North Sumatra had received training from Musim Mas, which facilitated the formation of the Labuhanbatu Independent Oil Palm Smallholders Association (APSKS LB). This association enables farmers to gain better access to resources and pursue important certifications, such as those from the Roundtable on Sustainable Palm Oil (RSPO) and Indonesian Sustainable Palm Oil (ISPO), signaling their commitment to sustainable practices. Musim Mas actively encourages the establishment of such associations among the smallholders it trains to enhance their opportunities for success.
Rob Nicholls, General Manager of Projects & Programs at Musim Mas Group, emphasizes the crucial role of smallholders in achieving palm oil sustainability. Through the BIPOSC project, Musim Mas aims to enhance farmers’ skills and knowledge, facilitating their success within a sustainable supply chain. Nicholls highlights that collaborating with additional partners will foster a wider impact, advancing smallholders’ expertise in regenerative agriculture and agroforestry practices. These methodologies not only integrate smallholders into a sustainable palm oil framework but also enable them to explore alternative income sources, particularly during the three-year replanting period when their palm oil crops may be unproductive.
Embracing Regenerative Practices
As climate change and biodiversity loss escalate, regenerative agriculture is emerging as a critical strategy for small farms. This method focuses on maintaining soil health, which is essential for productive farming. By implementing practices that prevent erosion and water runoff, regenerative agriculture not only protects topsoil but also enhances water retention and quality. Moreover, these practices have the potential to reduce greenhouse gas emissions and nitrogen leakage, contributing to a more sustainable farming system. As smallholders adopt regenerative techniques, they can improve crop yields while also fostering a healthier ecosystem.
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“As a global development partner organization, SNV aims to support Indonesia in achieving its Sustainable Development Goals (SDGs). To achieve this, we need to implement effective and impactful programs to transform agricultural and food systems, energy, and water. In the BIPOSC project, we promote a comprehensive regenerative agriculture and agroforestry model to maintain soil fertility and biodiversity, providing maximum benefits for farmers’ livelihoods and economy,” said Rizki Pandu Permana, Country Director of SNV Indonesia.
As per the release, key regenerative agriculture techniques were taught including the application of bio-input, mulching to protect topsoil, planting cover crops, integrated pest management which reduces the need for chemical pesticides. Farmers also learned to apply compost, helping to decrease reliance on chemical fertilizers. So far, 1,032 independent smallholders have received training and implemented these practices on a total area of 1,063.68 hectares. Additionally, the project has trained 25 village facilitators to provide hands-on support, and seven demonstration plots have been established as pilot areas and learning centers for regenerative agriculture.
As farmers embraced regenerative practices, many have reported increased yields and enhanced soil quality. Bernard Giraud, President and Co-Founder of the Livelihoods Fund, recalled a visit to the region where farmers expressed concerns about their heavy reliance on fertilizers. “While fertilizers can boost yields, there was a clear lack of understanding about how to protect soil from long-term degradation,” he notes. The BIPOSC project specifically addresses this issue by providing farmers with vital knowledge on maintaining soil health and structure. Giraud emphasizes that the project has successfully filled this gap, resulting in farmers now reporting both higher yields and healthier soils on their plots.
Building Capacity through BIPOSC
In addition to training, the project focuses on capacity-building initiatives. One of the standout achievements is the development of a composting unit managed by the APSKS LB (Asosiasi Pekebun Swadaya Kelapa Sawit Labuhanbatu) association. This facility has the capacity to produce 100-150 tons of compost per month, using inputs from local mills and farmer plots. By offering compost at half the usual market price, the unit not only reduces costs for smallholders but also generated a profit of IDR 421 M in its first year, producing a total of 588 tons of compost.
The Future of Palm Oil in Indonesia
As of 2023, independent smallholders manage approximately 41% of oil palm plantations in Indonesia, accounting for about 6.94 million hectares. This figure is projected to rise to 60% by 2030, underscoring the critical role of initiatives like BIPOSC in shaping the future of sustainable palm oil production. By equipping smallholders with the tools and knowledge they need to succeed, the project aims to create a more resilient agricultural landscape that benefits both farmers and the environment.
“One of the most impactful outcomes of this program for smallholders is the Composting Unit as the business model around it. It enables smallholders to obtain compost affordably, and the profits are shared among member farmers. This is a practical solution to promote the adoption of composting and all ASPKS-LB smallholders are now using compost in their plots.”
In the face of climate change and biodiversity challenges, the collaborative efforts in Labuhanbatu serve as a hopeful model for sustainable agriculture, demonstrating that with the right support, smallholders can thrive while contributing to a healthier planet.