Two Asian Agri Partner Cooperatives in Riau Sign Agreement on Smallholder Oil-Palm Replanting Programme

The signing ceremony, held at Hotel Aryaduta in Jakarta, marks a strategic milestone in an effort to enhance the productivity of scheme smallholders through the replanting of aging palm oil plantations.

The two cooperatives receiving PSR funds on this occasion were KUD Sejahtera from Desa Makmur, Kerinci District, Pelalawan Regency, Riau, covering 179 hectares and consisting of 78 smallholders, and KUD Kebun Sawit Harapan from Desa Gabung Makmur, Kerinci Kanan District, Siak Regency, Riau, spanning 219 hectares with 95 smallholders.

During the event, Normansyah Hidayat Syahruddin, Director of Upstream Fund Distribution at BPDPKS, urged the chairpersons and board members of the cooperatives to manage the PSR funds responsibly and with integrity. "These funds must be utilised properly to improve the welfare of members and support the sustainability of farmers' businesses," he emphasised.

Replanting is more than merely replacing palm trees that have reached the end of their productive years. It is a key strategy to restore yields in aging plantations while ensuring stable income for smallholders. It also promotes land-use efficiency and supports agricultural intensification. With financial support from the PSR programme and continuous technical guidance, partner smallholders are expected to accelerate the replanting process and adopt more productive, sustainable cultivation practices that are both more productive and sustainable. In doing so, the programme delivers economic benefits while strengthening the long-term sustainability of the palm oil industry and the environment.

Hendra Saragih, Plasma Manager at Asian Agri, a member of the Royal Golden Eagle (RGE) group of companies founded by Sukanto Tanoto, highlighted that financial support and technical support are essential to the success of the replanting programme. "Adequate funding and structured guidance ensure that replanting meets technical requirements and remains economically viable. We support smallholders from the financing stage through planting and even after loan repayment, so that the newly replanted estates can achieve optimal productivity and provide maintain stable income for the smallholders. This guidance also equips them to manage their plantations more productively and sustainably in the long run," he said.

Agus Sumiran, Head of KUD Sejahtera, shared his optimism, saying, "This funding brings new hope for our farmers. With this support, we can rejuvenate our plantations and improve yields, ensuring the continued well-being of our members."

Suryadi, Head of KUD Kebun Sawit Harapan, added, "We truly feel the strong support from this programme, even though challenges remain as we wait for the new trees to begin producing. The financial assistance and technical guidance have helped us better navigate this transition period."

This programme aligns with Asian Agri's 2030 sustainability targets, particularly under the smallholder partnership pillar. The company remains committed to encouraging all partner farmers to undertake replanting as a strategic effort to address declining productivity and strengthen long-term sustainability.
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About Asian Agri

Founded in 1979, Asian Agri is one of Indonesia's foremost companies in crude palm oil production, managing over 100,000 hectares of oil palm plantations and employing over 20,000 people.

As a pioneer of the Indonesian Government's Smallholder Transmigration Core Plantation Programme (PIR-Trans), Asian Agri has partnered with 30,000 scheme smallholders in Riau and Jambi, who collectively manage 60,000 hectares of oil palm plantations. The company also fosters partnerships with independent smallholders to enhance their welfare and drive socio-economic growth.

Committed to sustainable practices, Asian Agri upholds a zero-burning policy and implements plantation best management practices to help smallholders boost productivity, increase crop yields, and improve supply chain traceability while supporting their journey towards certification. Asian Agri's mills leveraged advanced technology and self-generated green energy to minimize greenhouse gas emissions.

Asian Agri's plantations, as along with their scheme smallholder plantations, are full Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability & Carbon Certification (ISCC) certified, underscoring the company's commitment to responsible and sustainable palm oil production.