Intensification on smallholder oil palm fields:

summary for the three years of the project

Patricio Grassini
Associate Professor
University of Nebraska-Lincoln
E-mail: pgrassini2@unl.edu
 Our Project

• Four-year project (started on June 1, 2019)

• Focus on independent smallholders
• Existing plantations located in mineral soils
• Goal: identify causes for yield gaps and evaluate cost-
effective management options to increase yield
Sites across six provinces

East
Kalimantan
Riau

West Kalimantan
Jambi

South Sumatra
Central
Kalimantan
 Main activities

• Survey of 1200 farmers (200 per province)

à Diagnosis of the socio-economic and agronomic
causes for yield gaps
• Demonstration of cost-effective management practices
à Increasing yield, profit and oil production
• Dissemination of results
à Farmers, universities, national and provincial
governments, and other stakeholders
 Large yield gaps in smallholder fields
Average FFB yield (14 t FFB t/ha/y) represents only 41% of the attainable yield.

Province Average yield

t FFB ha-1 y-1 % of attainable yield*
Riau 15 47%
Jambi 11 34%
South Sumatra 13 41%
West Kalimantan 14 34%
Central Kalimantan 19 52%
East Kalimantan 13 38%
Average 14 41%
* Attainable yield estimated as 70% of the yield potential as determined using well-calibrated crop models and based
on local weather, soil type, and palm age. Average attainable yield across the seven provinces was 35 t FFB ha-1 y-1.

Monzon et al. (in preparation)

 What explains the low FFB yield?
Besides the effect of agronomic practices on FFB , dura contamination further reduces oil production

Harvesting
Palm age
Palm stand
Nutrients
Pruning
Soil/terrain
Weed
Soil/water management This plantation cycle
Planting material
Dura Next plantation cycle
Pest/diseases

0 25 50 75 100
% Appearance (%)
Monzon et al. (in preparation)
 Moving from diagnosis to yield gap closure

• Selection of seven farmers in each province to demonstrate

management options to narrow the existing yield gap

• Each farmer has two fields (same age, same planting material, same soil):

à A reference (REF) field where we let farmers continue with their

usual management practices

à Another field where we provide technical support to the farmer

to implement best management practices (BMP) to increase both
yield AND farmer profit
 Best management practices (BMPs)
Harvest criteria and frequency Pruning and frond arrangement

Nutrient rate, source, timing, and placement Management of weeds and beneficial vegetation
 Yield trends in BMP trials
Implementation of BMPs lead to higher yields in Year 1 (+14%), Year 2 (+33%), and Year 3 (+50%).
The yield benefit increases over time as palms keep benefiting from the improved plant nutrition status.

Each value corresponds to the average across provinces

Sugianto et al. (in preparation)

 Impact of BMPs on farmer yield and profit
Shown below is a side-by-side comparison of REF versus BMPs for a field in West Kalimantan.
In this field, the BMPs increased yield by 52%, generating a comparable increase in profit.

REFERENCE BMP

Photo taken by Hendra Sugianto

 Economic analysis – Years 1 & 2 combined
Implementation of BMPs resulted in increased net profit in 70% of the sites.
The economic benefit will be even larger in subsequent years

Province Total cost* Gross Net Extra profit due

(M IDR ha-1) income** income*** to BMPs (%)
(M IDR ha-1) (M IDR ha-1) (and ranges)

REF BMP REF BMP REF BMP

Riau 10 22 53 68 43 46 +8% (-34, +41%)
Jambi 5 12 32 48 28 36 +30% (+2, +78%)
South Sumatra 10 21 46 74 36 53 +50% (-8, +100%)
West Kalimantan 13 25 56 70 43 46 +5% (-4, +47%)
Central Kalimantan 13 22 70 77 58 55 -5% (-25, +25%)
Average 10 20 52 68 42 48 +19% (-34, +100%)
* Includes all inputs and labor costs
** Based on FFB yield and actual FFB price received by farmers
*** Estimated as the difference between gross income and total costs

Sugianto et al. (in preparation)

 What factors influence (or not) BMPs impact?

• Level of BMP implementation

à Lower impact with poor implementation
(due to knowledge gaps, lack of access to inputs, motivation, etc. Not necessarily
related with farm size and/or household income)

• Current yield level

à Positive impact across the whole range of yield but
quicker and larger when the initial yield is low.
• Planting material
à Positive impact occurs with any type of planting material.
Hence, BMPs are needed to capture and amplify the
positive impact of better planting material on CPO production
 Scenario assessment
Implementation of BMPs across all independent smallholders would amplify the effect of current
replanting programs, leading to a positive socio-economic impact while sparing land for nature.

Replanting Replanting
Variable (per year) Baseline BMPs only
only & BMPs
Yield (t FFB/ha) 15.2 15.2 20.2 20.2
Oil extraction rate (%) 19% 23% 19% 23%
Farmer income (million IDR/ha) 42 42 48 48
National CPO (million tons) 10.1 12.2 13.4 16.2
Economic impact (billion USD) 15.1 18.3 20.1 24.3
Potential land saving (million ha) 0 0.7 1.1 2.1
Assumptions: full adoption across all mature independent smallholders’ oil palm area in mineral soils in Indonesia (3.5 M ha), and current
CPO price (1,500 USD per t CPO). Note that our estimate of BMP impact on FFB yield, profit and production is conservative considering
that the yield benefit from BMP adoption is expected to be larger after year 2. Oil extraction rates were based on measurements
performed in our field trials. Note that independent smallholders’ price is independent from their level of dura contamination and,
instead, they get paid based on FFB weight. Potential land saving was estimated as the area needed to achieve the extra COP increase in
each scenario given current OER and yield in the baseline.
 Main messages

• There is a large exploitable yield gap in current

plantations, with larger gaps in smallholder farms.
• Besides planting material, better agronomic
management is needed to close the yield gap in
smallholder fields
• Strong evidence of nutrient deficiencies and imbalances and poor field upkeep
• +12% increase in FFB yield during first year, +32% increase during Year 2, and +50% increase
during Year 3 in BMP trials as a result of better field upkeep and plant nutrition, with an overall
+15% increase in net income

• Need to complement technologies with policy and

knowledge
• Tuning current fertilizer subsidy programs to better address oil palm nutrition.
• Strengthening extension services to fill in the knowledge gap of oil palm smallholders.
 Proposal for third phase
• Moving from local to large-scale BMP dissemination
• National project, including a pilot aiming to reach out 20,000+
smallholders in two provinces
• Priority areas: those with large number of smallholders,
far from forests and peatlands, and with similar climate
and soil to the sites where our BMPs were evaluated so
that our solutions can be extrapolated with high
confidence
• Areas in Riau, South Sumatra, Jambi and West Kalimantan.
• Potential partners: current/new NGOs that we are
working with, with support from provincial
governments, PPKS, and large plantations
• Other suggestions for partners from the embassy?
 Proposed main activities
• Training
• Leveraging from existing oil palm smallholder networks and dissemination
through ‘oil palm’ schools: GYGA as a “trainer of the trainers”

• Monitoring and impact assessment

• Production, socio-economic and environmental outputs

• Research
• Understand drivers/barriers for adoption of BMPs

• Policy
• Tune current policy on fertilizer subsidies and re-align extension services
so that they can better tackle agronomic constrains in farmer fields
Thanks! Question?
 Where to scale out intensification?
Desirable Criteria: areas with climate and soil comparable to those where BMPs were
evaluated, far from forested areas and peatlands, including large number of smallholders

Oil palm area

Forest area

Each color in the maps represents a combination of climate and soil

wherein the response to a given technological package is expected to be
similar (Source: Agus et al., in preparation)
 Orienting sustainable intensification for greater impact
Oil Palm area in Number of
Province mineral soils smallholder Forest area (%) †
(million ha) households‡
Aceh 0.5 122165 54
Bangka-Belitung 0.2 36103 14
Bengkulu 0.2 105990 34
Jambi 0.7 332054 22
Lampung 0.3 54819 9
North Sumatra 1.2 223836 23
Riau 2.2 883471 18
South Sumatra 1.1 324903 9
West Sumatra 0.4 111920 45
Central Kalimantan 1.5 197120 47
East Kalimantan 1.3 128010 51
North Kalimantan 0.2 19272 82
South Kalimantan 0.6 53170 20
West Kalimantan 1.2 287537 38
† Source: https://drive.google.com/file/d/1D4-qyApgiBY1ZjHJqiIzphnJ7EeZLPvj/view
‡ Estimated assuming 2 hectare (ha) per smallholder farm