Indonesia

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

Given Indonesia’s abundance of both renewable (agricultural products) and non-renewable (mines and minerals) resources, implementing long-term resource management is an imperative.

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

• Palm oil

Oil palm cultivation has long been a traditional activity in Indonesia.
Today, palm plantations are operated as follows:

• around 55% by agro-industries ;
• 41% by village planters;
• 4% by parastatal companies.

This rather surprising distribution is explained by the implementation of the “Plasma Program”. The new large-scale industrial plantation projects (Inti) are obliged to develop, with financial support from the State and in parallel with their palm groves, oil palm plantations dedicated to local communities. The agro-industry is responsible for setting up the “plasma” plantation: from the nursery to the maturity of the palm trees (around 3 years). Then, as soon as the palms reach maturity, the palm grove is handed over to the village communities, who harvest and manage their plots. Finally, the sale of the harvest (fruit) enables them to reimburse the agro-industry for the investments previously made.

In Indonesia, palm oil is mainly destined for the food industry and for export. Considered one of the forerunners in the implementation of RSPO principles and criteria, the archipelago had 2 586 929 hectares of RSPO-certified oil palm plantations as of March 31, 2023.

• Rubber (rubber farming)

Indonesian rubber production comes mainly from village plantations (90%). Less than 6% comes from agro-industries and just over 4% from parastatal companies. In addition, a significant proportion of rubber is sold locally. These two characteristics totally distinguish Indonesian rubber farming from that of its African counterparts.