Regulating Plasma Gardens
Monday, 30 April, 2012 | 21:57 WIB

TEMPO Interactive, Jakarta:The Agriculture Ministry plans to curb palm oil companies that have failed to establish smallholder plantations, or plasma. The government seeks to improve the partnership scheme that has been ongoing for more than 20 years. The Program Inti Rakyat (People’s Plantation Program or PIR) was originally meant to increase the welfare of citizens who live around the plantation companies. Plantation companies are expected to help the citizens in cultivating their smallholder plantations. A tangible plantation development beneficiary should be the plasma farmer, or smallholder of oil plantations, thanks to a government backed scheme based on a government regulation issued in 2007. The regulation stipulates that each farming household is to be given ownership of oil palm land in partnership with the designated plantation company.

Based on Agriculture Ministry Regulation Number 26 Year 2007, plantation companies are required to allocate a minimum of 20 percent from the total area of the main plantation under their management, to local farmers. Development of the plasma plantations are supposed to start at the same time as the main plantations managed by the companies. Ideally, this scheme should reflect the true nature of corporate social responsibility by which a company is responsible for nurturing its partner farmers in adopting good agricultural practices.

The reality, however, is far from expectations. Temporary results from an audit performed by the Agriculture Ministry between February-March 2012 has shown that out of 406 companies with plantation permits across 22 provinces in Indonesia, only 61 have facilitated the development of smallholder plantations for local farmers. The plasma plantations measure just about 85.242 hectares in all.

Total plantation area development plans from all companies amount to as high as 2.2 million hectares, while the total developed smallholder plantations is supposed to reach around 440,000 hectares. “It means that less than 4 percent has been allocated for plasma plantations at the moment,” said Plantation Director General Gamal Nasir.

Non compliant companies gave a variety of reasons, one of them being unavailability of lands to be 'distributed' to the locals, as the HGU (Land Utilization Right) for their lands were put up as bank collaterals, Gamal explained. The Article 38 of the decree which stipulates that the companies should be given three warnings in four months for their non-compliance and their failure to react will result in business permit revocation as well as recommendation to relevant institutions to revoke the HGU.

Gamal said that authority lies with regent or governor as business permit issuing authority. When the regent issue the permit, 20 percent of the land should have already been 'cut' for the smallholder plantations. He said, non-compliant companies in operation during 2007-2012 should be asked to implement corporate social responsibilities or CSR programs instead. Or the regional government allocates additional land for plasma orchards, if possible. *****