Indonesia

With over a century of experience in the agricultural sector, Indonesia – the country with more than 13 000 islands – is the world’s largest producer of palm oil and is the second largest rubber producer.

Indonesia abounds in resources of both the renewable (agricultural products) and non-renewable (mining and minerals) kinds, and the implementation of a long-term management approach to these resources is imperative.

Agriculture has played a major role in the country’s development, and for centuries has been the leading source of employment. Indonesia currently has a production surplus on the national palm oil and rubber market, and is a major exporter of raw materials.

  • Palm oil

The cultivation of the oil palm has long been a traditional activity in Indonesia.

Today, the areas under palm cultivation break down as follows:
- agro-industrial companies: around 50 %;
- smallholders: 40 %;
- parastatals: less than 10 %.

This rather surprising distribution is explained by the implementation of the Plasma Programme in support of smallholders.
‘The new major industrial plantation projects (Inti) are required to develop, with the financial support of the State and in parallel to their own plantations, oil palm plantations dedicated to local communities. Agro-industry, which has the technical, material and financial resources for substantial economies of scale, is responsible for the establishment of the ‘plasma’ plantation from nursery to mature palm trees – a period of approximately three years. Then, once the palm trees mature, the plantation is transferred to the village communities, which harvest and manage their plot. Finally, the sale of the crops (fruits) enables them to reimburse the agribusiness for its investments.’

In Indonesia, palm oil is mainly used in the food industry or exported. Regarded as a pioneer in implementing the RSPO Principles and Criteria, the archipelago currently has 898 915 hectares of RSPO-certified oil palm plantations.

  • Rubber

Indonesian rubber production mainly comes from village plantations (85 %). Less than 7 % derives from agro-industry and just over 8 % from parastatals. Moreover, a significant proportion of the rubber is sold locally. In these two characteristics, Indonesian rubber cultivation is completely different from its African counterparts.

An important driver of development in remote areas, rubber cultivation also enables pure green energy to be produced: natural rubber can replace synthetic rubber (a petroleum distillation product) and represents a significant carbon sink.


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