How Can Oil Palm Contribute to the Sustainable Development of Villages
Investing in the development of villages can significantly reduce poverty and inequality in Indonesia as half of the Indonesian population is still living in rural areas. As of mid-2020, the UN estimated Indonesia’s population to reach over 200 million, making it the fourth most populous country. Indonesia’s government has issued the 2014 village law and set up the Ministry of Village, Development of Disadvantaged Regions and Transmigration (Kementerian Desa, Pembangunan Daerah Tertinggal, dan Transmigrasi) to accelerate villages’ development and strengthen its capacity.
Sustainable development is key to the stable growth of the present and future economy. If well-planned and managed, oil palm development can uplift communities, provide employment, and generate investments in infrastructures. This is why Musim Mas started a ground-up program to help interested villages grow oil palm sustainably. Started voluntarily in 2000, Musim Mas runs the Village Development Program (Kebun Kas Desa – KKD) in three provinces in Indonesia, namely Riau, South Sumatra, and Central Kalimantan. The program has improved villages’ economies and has helped alleviate the gap between rural and urban communities.
“We are motivated to grow oil palm in our village through the Musim Mas’ Village Development Program as we saw neighboring villages, namely villages Tanjung Beringin and Betung, benefit a lot from it. Hence, our village government deliberated with the village consultative body (Badan Permusyawaratan Desa – BPD) to develop our village and grow oil palm. After we reached an agreement and relinquished five hectares of land, we proposed the establishment of KKD to Musim Mas in our village.” said Ediwarman, Head Village of Batang Kulim, Pangkalan Kuras, Pelalawan Regency, Riau.
Musim Mas facilitates the entire development and management of the village’s oil palm farm, from preparing the land, planting, providing seedlings to maintenance, such as fertilizing, spraying, and harvesting. Musim Mas funds the initial investment costs for the development and management of KKD. It is then reimbursed or paid in installments by the village after their farm starts bearing fruit.
Musim Mas implements the same agricultural practices in its plantations to farms under KKD. This ensures that the quality and sustainability standards of FFBs are upheld. In addition, Musim Mas conducts training on oil palm cultivation and provides communities with technical guidance.
Unlike the Smallholders Oil Palm Development Program (Kredit Koperasi Primer Anggota – KKPA) (please refer to the blog article), which is targeted at individual scheme smallholders, KKD is targeted at village governments for sustainable development at a village level. The income generated from KKD usually supplements the villages’ government annual budget to finance programs or additional activities, such as sponsoring youths to participate in tournaments by paying for their registration fees and providing accommodation. The income generated from KKD has also been channeled into building public facilities and infrastructures, such as clinics and places of worship. It also helps communities explore various forms of livelihoods, such as providing capital assistance for sewing groups.
“We believe the proceeds from this program will help the village government fund various projects that will be impactful to the communities, such as youth activities, celebrating national or religious days, and supporting relief efforts during natural disasters,” said Ediwarman, Head Village of Batang Kulim.
Read more about the impact we have on the lives of smallholders, villages, and communities in our Social Impact Report.