Lang
Replanting smallholder farms and raising palm oil productivity have become central pillars for securing raw material supply across Indonesia's vegetable oils sector, particularly as the government advances plans to raise national biodiesel blending ratios, most notably through the B50 initiative targeting a 50% biofuel mix.
PT Perkebunan Nusantara IV PalmCo, a subsidiary of state-owned plantation holding PTPN III (Persero), has emerged as one of the leading developers of an integrated partnership model with smallholder farmers, anchored by the People's Replanting Program (PSR) and a suite of technical and institutional support measures.
The company's efforts received formal recognition in two key regions in late August 2026. PTPN IV Regional III in Riau won the Sustainable Partnership Award for Empowering Smallholders at the Tribun Pekanbaru Awards 2026, while PTPN IV Regional V in West Kalimantan received the Pioneer Award for accelerating the replanting of smallholder palm oil farms at the Pontianak Awards 2026.
These honors came at a time when the Indonesian government is intensifying efforts to develop its biodiesel sector, including the B50 initiative, which is expected to substantially lift domestic demand for crude palm oil (CPO).
Jatmiko K. Santosa, President Director of PTPN IV PalmCo, stated that any increase in palm oil consumption for energy purposes must be matched by higher productivity on smallholder plots, so that the additional demand for biofuel feedstock does not weigh on supply for the food industry and other downstream sectors.
According to Santosa, implementing a 50% biodiesel blend is projected to add between one and two million tonnes per year of domestic crude palm oil to absorption by the energy sector.
'Palm oil smallholders are the backbone of this industry. Around 30% of the raw material supply for PalmCo's processing operations comes directly from smallholder plots,' he said in Jakarta. He added that raising smallholder productivity is the optimal route to meet rising energy demand while preserving feedstock availability for food needs and easing pressure to clear new land.
PalmCo's partnership package spans several pillars, including joint or single management of plantations, supply of certified high-quality seeds, crop purchase partnerships, and capacity building for agricultural cooperatives. This approach encourages farmers to upgrade their agronomic practices and farm management standards.
Support extends beyond the cultivation stage. Within the partnership framework, the company also acts as an off-taker and last-resort buyer of farmers' output, absorbing fresh fruit bunches (TBS) under mechanisms and prices set in line with prevailing regulations.
These efforts are complemented by the company's assistance to partner farmers in obtaining the Indonesian Sustainable Palm Oil (ISPO) certification and the Roundtable on Sustainable Palm Oil (RSPO) certification.
Source: VOI.ID