The sustainability of global palm oil supply chains depends on being able to determine who is producing the oil palm, where they are cultivating it and how it is being cultivated. The traceability of palm oil supply chains is complicated when they involve independent, small-scale oil palm farmers. In contrast to plantations, plasma farmers, little is known about independent oil palm farmers, including where their farms are, how they farm and to whom they sell their produce to. Independent farmers cultivate oil palm mostly without support from the government or companies, which affects the quality and quantity of the fresh fruit bunches they produce. Ensuring that independent, small-scale oil palm farmers are cultivating oil palm sustainably and productively is an integral step to in reducing the environmental harm caused by oil palm cultivation. To achieve that goal, we first should study these farmers and where they are.
This study aims to contribute to improving the understanding about independent, small-scale oil palm farmers in Indonesia. For consistency, we refer to independent, small-scale, oil palm farmers as independent smallholders in this report. The study reports on the findings of ongoing surveying and mapping activities of independent, oil palm smallholders in two districts in Central Kalimantan, Indonesia: Kotawaringin Barat and Seruyan. From 2014 until the end of 2015, 1,229 farmers were surveyed and had their lands mapped in the two districts. This included eight villages in Kotawaringin Barat District covering 1,671.61 hectares, and another eight villages in Seruyan District covering 2,182.75 hectares. The figures represent around 6 percent of the total number of oil palm farmers in Kotawaringin Barat District and 9 percent of the total number of oil palm farmers in Seruyan. In Kotawaringin Barat, the farmers were generally from transmigrant communities (87 percent), with a smaller proportion consisting of local farmers (12 percent). In Seruyan District, however, the majority of farmers surveyed were indigenous farmers (81 percent).
The report analyses the main challenges that prevent independent farmers from cultivating oil palm productively and sustainably. Building on previous studies of independent smallholders, we anticipated that the main constraints for farmers to benefit from oil palm cultivation were:
- Legal recognition of their land rights;
- Access to credit, planting material, fertilizers and training; and
- Fair terms and prices for the sale of harvested fresh fruit bunches.
Review of the New Local Government Law:
What are the new distribution of functions and authority between national and local governments for natural resource management?
In September 2014, the Indonesian government enacted the new Local Government Law, Law No. 23/2014 that replaced the old Local Government Law, Law No. 32/2004. Although it recentralizes some authority back to the central level, the new law provides clearer guidance related to the distribution of governmental functions between the central and local governments. This article summarizes the legal analysis of the old and new Local Government Laws. Specifically, this article will analyze the shift of authority and distribution of governmental functions among the central, provincial, and district governments, especially with regards to land-based sectors, including forestry, land, agriculture, and spatial planning.
The analysis finds that there are a number of significant changes to the distribution of governmental functions and authority with regards to the aforementioned sectors. In the forestry sector, the central government retains the authority over state forest areas, which includes the planning and licensing process, the implementation of forest management and monitoring. Specifically at the implementation level, the authority for the forestry sector is closely related to the authority for Forest Management Units (FMU). The authority, which was previously distributed among district/municipal or provincial governments, has now been allocated solely to provincial governments. In the land sector, the new law devolves most of the authority for land functions to the provincial or district/municipal governments. With regards to spatial planning, there is no significant change in the distribution of governmental functions between the old and new Local Government Laws. in terms of licensing, according to the new law, a district/municipal government has the authority to issue more permits than the central government, while, a provincial government does not even have any licensing authority regarding spatial planning.
The implementation of the new law will depend on a number of operational regulations, one of which is the revision of Government Regulation No. 41/2007 on Local Organizational Apparatus, which is under the auspices of the Ministry of Home Affairs. In the absence of such regulations, this article suggests different scenarios that may be applied by the national government to implement the Law.
Land for new pantations is increasingly scarce in Indonesia. This scarcity increases the importance of performance monitoring of existing concessions to achieve sustainable socio-economic growth. Existing concessions are expected to have better productivity and stronger partnerships with smallholder farmers. Plantation companies are expected to comply with good social and environment practices. Based on the current guidelines of the Ministry of Agriculture Decree No. 07/2009, failing to comply with the regulation can cause their business licenses to be revoked. Monitoring can assess the level of compliance with regulations, while providing information on productivity that can help mitigate the negative impacts of the operations on surrounding communities and the environment. Monitoring and evaluation of companies performace should be conducted from the establishment of plantations until the operational phase.
Central Kalimantan has a vigorous, productive palm oil sector that contributes 28% of the province’s GDRP, generates 165,600 jobs, and that pro- vides incomes to many smallholder families. Palm oil production is often as- sociated with deforestation, which could become an important barrier to access- ing palm oil markets, while diminishing the long-term well-being of Central Ka- limantan society. Deforestation could be reduced or ended by increasing the pro- ductivity of existing palm oil plantations and by redirecting expansion of palm oil plantations onto lands that are already cleared and far below their productive potential. To achieve this transition, im- portant obstacles must be overcome. This roadmap, developed with input and support from several Districts, palm oil companies, and civil society organiza- tions, summarizes a plan for reducing deforestation while increasing palm oil production and elevating rural incomes of smallholder families.