Optimisation of plantation sector: Urgency of oil palm replanting in West Sumatra

This article has been translated by PwC Indonesia as part of our Plantation News Highlights service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Bisnis Indonesia - Optimalisasi sektor perkebunan: Urgensi replanting sawit Sumbar

30 August 2023

By: M. Noli Hendra

Padang - Oil palm rejuvenation or replanting in West Sumatra Province must be accelerated considering the suboptimal land area coverage of this programme. This effort is needed to increase palm oil production in this region in the future. 

The West Sumatra Province Food Crops Plantation and Horticulture Agency noted that, based on the mapping of oil palm plantations in the area, there are 98,727 hectares (ha) of land that need replanting. 

Of this total area, 66,522 ha are plasma plantations, while 33,955 ha are independent plantations. 

Secretary of the West Sumatra Province Food Crops Plantation and Horticulture Agency, Ferdinal Asmin, explained that oil palm replanting at the end of last year was recorded at 31,000 ha. This means that 68.6% of West Sumatra’s oil palm land still needs to be rejuvenated. 

“We have started replanting activities since 2018. Of the 98,727 ha, we work on it in stages every year. So, we have agreed on annual targets,” he said on Tuesday (29/8). 

He reckoned that the total area of oil palm land that needs to be replanted is quite large because the total area of oil palm plantations in this region reaches 420,000 ha. 

This means that 23.5% of oil palm land in West Sumatra needs rejuvenation. 

“So, on average, the replanting target every year is 3,000 ha. However, I have not received the data for each regency this year,” he said. 

Nevertheless, the replanting target for seven regencies in West Sumatra this year reached 5,300 ha. This target is specifically for smallholder oil palm plantations (PSR). Meanwhile, plasma plantations will be handled by oil palm plantation companies and their partners. 

The details for PSR replanting targets are Dharmasraya Regency 1,800 ha, Sijunjung Regency 500 ha, South Solok Regency 500 ha, Pesisir Selatan Regency 500 ha, Agam Regency 500 ha, West Pasaman Regency 1,000 ha, and Pasaman Regency 500 ha. 

“The replanting targets vary every year, depending on the agreement between the agency and the seven regencies. Usually, we can replant 10,000 ha of oil palm plantation every year,” he explained. 

According to him, oil palm replanting in West Sumatra cannot be carried out in large numbers every year due to several problems in the field. 

He detailed that one of the problems is the incomplete terms and conditions for obtaining oil palm seedlings for replanting. These requirements, he added, include the location which must be in the plantation group, the land condition, and other paperwork requirements. 

Ferdinal explained that the West Sumatra Provincial Government provides around 50,000 certified superior seedlings every year to support the replanting programme. 

He views that the current challenge in replanting is strengthening coordination with the agricultural agency of the regencies and educating oil palm farmers. 

“There are also farmers who do not want to replant. Because they think it will take a long time to harvest the oil palm. Considering that, from planting to harvest, it takes approximately 5 years,” he said. 

In fact, there are several reasons rejuvenation is necessary, namely plants that have passed their productive age, plants damaged due to pests or diseases, and low plant productivity because they do not use certified superior seedlings. 

Therefore, he hopes that, in this oil palm rejuvenation, the community or farmers are also encouraged to organise themselves in a business forum to synergise their strengths, so that they become strong and independent. 

He added that supporting factors are also needed, such as mapping, Plantation Business Registration Certificate for Cultivation (STD-B), environmental management statement letter, and land tenure certificate and/or statement letter.

Increased production 

However, the productivity of West Sumatra’s oil palm plantations this year will increase following the improvement in the price of fresh fruit bunches (FFB). 

“We estimate that productivity will continue to improve, because palm oil prices have been quite good,” said Ferdinal. 

Data from Statistics Indonesia (SI) shows that West Sumatra’s palm oil production last year reached 674,000 tonnes or up 6.5% year-on-year. 

Meanwhile, at the West Sumatra FFB Pricing Team meeting on Sunday (27/8), the price of West Sumatra FFB was set at Rp2,500 per kilogram. 

Ferdinal believes that the increase in West Sumatra’s palm oil production this year will be supported by several regencies, namely West Pasaman Regency, Dharmasraya Regency, Pesisir Selatan Regency, South Solok Regency, Sijunjung Regency, and Agam Regency. 

Moreover, he confirmed that until now there has been no increase in oil palm plantation area owned by companies as a moratorium is still in place. 

However, conflicts over oil palm land with the community remain a problem in boosting this main plantation sector. 

“The problems of oil palm plantations in West Sumatra include the problems faced by smallholder plantations regarding the quality of the plants, prices, and the location of oil palm plantations in forest areas,” he explained. 

Meanwhile, Marlin, an oil palm farmer in Sutera District, Pesisir Selatan Regency, reckons that the price of oil palm at Rp1,350 per kilogram is quite good for PSR. 

“That price is actually quite good compared to before, which was only Rp700 per kilogram. Wholesalers buy at that price,” he said. 

However, he said that the price of oil palm for smallholder plantations at Rp1,350 is only enough to meet family expenses. Moreover, he only has 1.5 ha of oil palm land. 

“I can only be grateful, at least there are still fruits to harvest. The most important thing is not to let the price go below Rp1,000 per kilogram,” he said. 

On the other hand, the Head of the Technical Implementation Unit (UPTD) of the Sijunjung Regency Protected Forest Management Unit (KPHL) Yandesman emphasised that the new oil palm plantation area in Tanjuang Kaliang is not a forest area, but an area for other uses. 

“The opening of new land for oil palm plantation in Sijunjung is estimated to have started 2 years ago. However, it became public after residents protested,” he said when contacted by Bisnis. 

Soon, the KPHL team will go to the location to ascertain the impact of opening new land for oil palm plantation.