Encouraging Acceleration of the Smallholder Palm Oil Replanting Programme
Accelerating the Smallholder Palm Oil Replanting Programme (PSR) is one of the keys to increasing productivity while maintaining the sustainability of the national palm oil industry. In this context, the acceleration of the PSR programme needs to be supported by targeted affirmative policies.
Head of the IPB University Palm Oil Study Centre, Professor Budi Mulyanto, said accelerating the PSR programme is very necessary given that many smallholder oil palm plantations have reached old age and are experiencing declining productivity, namely those aged 25 years or more. This condition could affect the availability of raw materials for the national palm oil industry.
Professor Budi Mulyanto emphasised that minimal raw material availability would have a negative impact on the success of the palm oil downstreaming programme. He said the development of the downstream industry must be aligned with strengthening the upstream sector in the national palm oil industry.
“This replanting is very important. Currently, almost 50 percent of Indonesia’s oil palm is smallholder-owned and most of the plants are old. If they are not replanted, how can we talk about the downstreaming programme? Because production determines downstreaming,” he said in Jakarta on Tuesday (11/8/2026).
The IPB University professor explained that one way to encourage the acceleration of the PSR programme is to use an affirmative approach. He hopes that the affirmative policy can provide special treatment or convenience for smallholder farmers, particularly regarding various administrative constraints and land legality.
“Accelerating the smallholder palm oil replanting programme requires affirmative policies related to land legality issues. The affirmative policy must be based on the principles of certainty, benefit, and justice,” he explained.
Budi Mulyanto assessed that the performance of the Plantation Fund Management Agency (BPDP) is quite good regarding the implementation of the PSR programme. This good performance is assessed from the benefits of the PSR programme for smallholder farmers, environmental sustainability, and the continuity of the national palm oil industry.
He added that the distribution of support funds by BPDP for the implementation of the smallholder oil palm replanting programme is also very good because it uses the precautionary principle and responsible governance.
“In providing funding support for the PSR programme, BPDP has been very prudent. The precautionary principle applied by BPDP is very important,” he stressed.
Head of International Relations of the Central Board of the Indonesian Palm Oil Farmers Association (DPP APKASINDO), Djono Albar Burhan, acknowledged that the PSR programme implemented by BPDP has provided positive benefits for farmers in increasing the productivity of smallholder oil palm plantations.
Djono Albar Burhan added that the PSR programme is a momentum for smallholder farmers to regenerate their crops while increasing production yields through the use of certified seeds or seedlings and the application of better plantation management.
“Of course, we palm oil farmers are greatly helped by the replanting programme. Amid declining productivity when oil palm plants are over 25 years old and productivity is below 10 tonnes per hectare per year, replanting is one solution to increase productivity,” he explained.
Djono hopes that there will be conveniences for smallholder farmers regarding the PSR programme requirements. He believes that these conveniences will encourage the acceleration of the implementation of the replanting programme in Indonesia. He added that there needs to be cross-sector collaboration involving the government at the central to regional levels to make it easier for smallholder farmers to participate in the PSR programme. He also hopes for business certainty for smallholder farmers, particularly regarding land legality. “There needs to be business certainty for palm oil farmers because currently there are still issues related to land legality,” he concluded.