Musim Mas - IFC joint smallholder project

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More than a year ago when planning for the Musim Mas - IFC joint smallholder programme, our executives had envisioned the holistic development of the participants’ knowledge and skill sets so that they can become self-reliant and successful farmers. "Our vision is for these independent Smallholders to be able to continue farming successfully beyond the project,” said Mr Jong Tjien Alimin, Musim Mas Smallholder Project Coordinator.    

The programme was modeled to enhance the farmers’ agricultural practices and improve other competencies such as financial literacy. The latter is often overlooked and yet is crucial for long term economic viability.    

At the start, the Farmer Advisors, who were tasked with the training of the farmers, were as much as possible, selected from within the participants’ community with a two-fold purpose of fostering a sense of ownership and an interest in the success of the programme.     

Oil palm Smallholders in Indonesia, and especially independent ones, are known to underperform in areas of productivity and sustainability. One of the key determinants of productivity includes fertiliser and its effective application. These Smallholders usually have problems obtaining quality fertilisers and, even if available, most Smallholders are not equipped with adequate knowledge on the proper implementation techniques. The participants were taught to choose the right fertiliser, and right way of applying it such as sowing the fertiliser circularly at a certain distance from the trunk.   

“Before attending this training, I was sowing fertiliser randomly, without paying attention to the distance, sometimes in the inter-row, other times right on the trunk. After joining this programme, I now know the correct practice of sowing fertiliser which I recently started applying to my trees. I hope the trees can bear more and better quality fruits,” said Burhan Dongoran, a participating smallholder. Pesticides and their safe usage were also included in the curriculum. As with fertilisers, the application of pesticides needs to be targeted so that it is effective. More importantly, the farmers were taught on how to safely prepare and apply pesticides without compromising their health and safety.    

Another important factor in determining the price of FFB, and hence the income of the farmers, is the harvesting standard which in turn will affect the FFB quality. To get the best yield, FFB needs to be harvested at optimum ripeness. Unripe FFB may be rejected at the mills, while underipeness will affect the oil extraction rate (OER) which will mean discounted price for FFB. The farmers were taught on the appropriate time to harvest the fruits. Better quality FFB will improve the price of their FFB and so increase their income .    

Financial literacy was also part of the training program. The concept of saving is especially important when their oil palm trees need to be replanted, leaving them with reduced or no income for about three years. They learned how to keep records of their financial transactions to manage revenue and expenditure for their farms. The attributes that would give them access to credit were also shared so that the farmers could utilise bank loans to purchase quality seeds and fertilisers and even hire labour to help with farm works.    

With Smallholders contributing about 40% of oil palm planted area in Indonesia, replicating such projects in other parts of Indonesia will possibly hold the key to unlocking the conservation-versus-development predicament through yield per hectare increase and improvements to sustainable practices without the need to develop more land. As demonstrated by the recent development in Indonesia such as the moratorium on land development, industry players need to focus on yield increase per hectare of land in order to remain competitive and relevant in the sector.    

At the one-year anniversary event for the project, held on 27 July 2016 in Suzuya Hotel in Rantau Prapat, North Sumatra, the smallholder participants, Musim Mas and IFC management gathered to take stock of the programme that has benefited over 1,100 members since its inception.    

The Regent of Labuhan Batu Regency, Mr H. Pangonal Harahap, expressed his appreciation to Musim Mas and IFC for running this programme for the benefits of Smallholders in the region and hoped that this would help improve their welfare. The Head of the Indonesia Sustainable Palm Oil (ISPO) Secretariat, Mr Herdradjat Natawidjaja, stated that the elements of improving access to technology, finance and markets were aligned with government policy.    

Mr Herman Tandinata, Deputy Production Director of the Musim Mas Group, announced at the event, “Given the experience in Rantau Prapat over the last year and the enthusiasm of farmers, the programme will be replicated in three new locations in the Province of Riau. An additional 9,000 independent Smallholders are expected to benefit from the programme.”    
The Musim Mas - IFC project is part of the Musim Mas Group’s vision of sustainable Palm Oil production, bringing a positive impact to the welfare of local communities. The Group is working closely with IFC to integrate independent Smallholders into its supply chain through stages of implementation and targets to ultimately benefit 12,000 independent Smallholders .