Asian Agri Awards $3.8M Sustainable Palm Oil Premium to Partner Farmers

In a move to support sustainable agriculture and empower local farmers, Asian Agri, a leading palm oil company, distributed a total of IDR 3.8 billion ($242,000) in premium sharing to its plasma partner farmers in 2023. This initiative rewards farmers who adhere to Roundtable on Sustainable Palm Oil (RSPO) standards, reinforcing the company’s commitment to sustainable palm oil production.

The premium-sharing event, held on December 12, 2024, at the Grand Jatra Hotel, benefited 38 farmer cooperatives (KUDs) comprising approximately 15,000 farmers. According to Asian Agri's Regional Head for Riau Province, Pengarapen Gurusinga, this initiative motivates farmers to maintain and improve the quality of their plantations, ensuring the sustainability of their RSPO certification.

“With RSPO certification, farmers can support a sustainable palm oil industry in international markets, especially Europe, which demands compliance with sustainability principles,” Gurusinga emphasized.

Empowering Farmers Through Strategic Partnerships

Rudy Rismanto, Head of Partnership at Asian Agri, highlighted that partnerships are central to the company’s sustainability strategy. These collaborations ensure a reliable raw material supply while benefiting farmers through technical assistance and guaranteed purchase agreements.

"Partnerships allow for better farm management, optimal production, and mutual benefits for both parties,” Rismanto stated. He added that these efforts aim to secure success across generations of farmers, ensuring long-term sustainability.

Farmers like Sudiyono, Chairman of KUD Jaya Makmur, have reaped the benefits of this collaboration. Partnering with Asian Agri since 1990, Sudiyono noted that the company’s guidance has enabled farmers to optimize plantation management and meet certification requirements.

“Our first premium sharing was in 2013, and we have received it annually since,” Sudiyono shared. Premium funds are utilized for group strengthening and alternative income generation during palm oil plantation rejuvenation phases.

Second-Generation Farmers See Sustainable Growth

Second-generation farmers, such as Anton Suhartono, Secretary of KUD Sawit Subur, have also benefited from the partnership. With Asian Agri’s assistance, Suhartono’s cooperative successfully applied for funding from the Palm Oil Plantation Fund Management Agency (BPDPKS) under the People’s Palm Oil Replanting (PSR) program.

“We also rely on Asian Agri’s Topaz superior seeds for replanting. These seeds deliver higher productivity, reaching 28 tons per hectare by the third year of harvesting,” Suhartono explained. Additionally, he highlighted alternative income strategies, such as organic chicken farming, supported by premium-sharing funds, to ensure financial stability during replanting.

Strengthening Farmer Communities Across Generations

First-generation farmer Irwan Ritonga, Chairman of KUD Bukit Makmur, praised Asian Agri for improving his family’s economic stability. Now entering the second generation, Ritonga trusts Asian Agri for plantation management and BPDPKS funding applications.

“Our partnership has provided technical guidance and high-quality seeds like Topaz, ensuring maximum yields,” Ritonga stated.

Asian Agri’s commitment to sustainable palm oil production showcases its role as a trusted partner for farmers, promoting economic stability, environmental responsibility, and long-term growth.