With over a century of experience in the agricultural sector, Indonesia – the country with more than 13 000 islands – is the world’s largest palm oil producer and second largest rubber producer.
Considering that Indonesia is rich in both renewable (agricultural products) and non-renewable (mining and minerals) resources, the implementation of long-term resource management is crucial.
Agriculture has played a major role in the country’s development, and has been the leading source of employment for centuries. Currently, Indonesia has a production surplus on the national palm oil and rubber markets, and is an important exporter of raw materials.
Oil palm cultivation has long been a traditional activity in Indonesia.
Today, the areas under palm cultivation can be divided as follows:
Agro-industrial companies: around 50%;
Parastatal enterprises: less than 10%.
This rather surprising distribution is explained by the implementation of the “Plasma Program” to support smallholders.
“The new major industrial plantation projects (Inti) are required to develop, with the financial support of the State and alongside their own plantations, oil palm plantations for the local communities. The agro-industry, having the technical, material and financial resources to achieve real economies of scale, is responsible for the development of the ‘plasma’ plantation: from the nursery until the palm trees reach maturity, or for approximately three years. Subsequently, once the palm trees reach maturity, the plantation is transferred to the village communities, who harvest and manage their plot. Finally, the sale of the crops (fruits) enables them to reimburse the agribusiness for their prior investments”.
In Indonesia, palm oil is mainly used in the food industry or exported. As a pioneer in the implementation of RSPO Principles and Criteria, the archipelago currently has 1 756 023 hectares of RSPO-certified oil palm plantations.
Indonesian rubber production mainly comes from village plantations (85%). In turn, less than 7% is produced by the agro-industry and just over 8% is produced by parastatal enterprises. Furthermore, a significant proportion of rubber is resold locally. These 2 features clearly distinguish Indonesian rubber production from its African counterparts.
As an important catalyst for development in remote areas, rubber cultivation enables the production of pure green energy: natural rubber is a substitute for synthetic rubber (a petroleum distillation product) and serves as a significant carbon sink.