The Directorate General of Estate Crops, Ministry of Agriculture, argues that palm oil companies and smallholder farmers have the potential to generate palm oil productivity by as much as 8.4 tonnes of CPO per hectare per year through yield intensification. This can be carried out by implementing Best Management Practices in underperforming mature oil palm stands. These include, but are not limited to, using high quality seedlings, applying sufficient quantities of fertilizer, controlling pests and diseases and managing the crops during the immature phase.
Of the total 4.7 million hectares of plantation area managed by smallholders in Indonesia, 1.7 million hectares are located in the forest area. Therefore, only around 3 million hectares of smallholder area outside the forest area can be prioritized by the government for intensification. Using the ideal productivity of 8.4 tonnes of CPO per hectare, we estimate that Indonesian smallholders can produce approximately 25.6 million tonnes of CPO annually through intensification undertaken outside forest areas. Smallholders could supply up to 71 percent of the current national palm oil production and 43 percent of projected production by 2045 if sustainable intensification techniques were implemented. Since this percentage is equal to the current proportion of smallholders’ plantation area, the rest of the target production (57 percent) could be fullfiled by companies, if they also implement the same techniques.