KUD Teratai Biru Village Cooperative

From Reluctance to Reaping Economic Rewards 

Since learning about sustainable farm practices through RSPO certification, Indonesian smallholders in South Sumatra have been enjoying better incomes and improved plantation management. 

In a village in the Musi Banyuasin District of South Sumatra, Indonesia, oil palm plantations have provided positive socioeconomic impacts since a group of smallholders in the area improved cultivation through environmentally and socially responsible practices — paving the way for them to get RSPO Certification.

The KUD Teratai Biru Village Cooperative has then been able to improve the livelihoods of its members as well as to extend employment and income opportunities to others.

The cooperative received RSPO Certification in July 2017 after PT Lonsum introduced the concept of sustainable practices to them and held socialisation and training sessions. “The smallholders were interested in joining RSPO because they believed that the certification has set good standards and goals for them as established in the RSPO Principles and Criteria,” said Pairan, Internal Control System Manager of Teratai Biru.  “One thing that the cooperative emphasised was that they wanted to remain independent.” 

He added that it was challenging to encourage and convince the farmers at the beginning, but they later understood that the way forward in the palm oil industry is to achieve sustainability. “The educational level of the smallholders is generally not that high, and they are in their 40s and 50s so it took time to make them understand about new things and also to shift to good agricultural practices, which appear as something unusually new.”

Better incomes and work conditions

He continued that the sustainable practices were ultimately applied and the farmers were happy with the results — better incomes. “Management of the plantation is much better now, allowing increased production. Before adopting the sustainable practices, production had once dropped drastically due to several conditions, but after joining the RSPO, farmers were able to manage their plantations well so that production rose.”

HCommunities in the village have also enjoyed better conditions. “The KUD can offer other people who are not part of the cooperative to work in the plantations as labourers or truck drivers; RSPO-certified farmers can even cover them with the health insurance from the social security agency (BPJS).”

In social affairs, he said, the cooperative has contributed to several programmes such as a mushola (small mosque) construction in the Tungkal Jaya Sub-district office and a security station construction in the Peninggalan Village. It’s also a main regular donor to some social activities in the neighbourhood, held during the commemoration of Indonesia Independence Day..

Internally, there have been improvements in the organisational system, strengthening the structure as well as documentation and archive systems. “The credit union service in the cooperative has improved its service, now it can serve all members, including those who have not yet joined RSPO.”

Pairan disclosed that the Cooperative is now in its fourth year of retaining its RSPO certification and it will try its best to get another five-year certification with good preparation starting next year. 

“They are also happy that they can share their knowledge with other farmers who have not yet applied good agricultural practices. Hopefully, this condition can continue and has a positive impact on all villagers.”

KUD Teratai Biruneeds support to get more improvement, added Pairan. “We hope for better service from the Government of Indonesia to facilitate farmers when dealing with plantation documentations. In addition, we hope to have support from companies to hold coaching and training in new and related matters, such as waste management and forest fires which require expertise and equipment. We also need much support from credit buyers.”

Total area covered by the project
318.62 Ha

Number of smallholders benefitting from this project
157

The group members of KUD Teratai Biru are in the fourth year of being RSPO certified and they still need assistance from the third parties to ensure that they can start preparing to get the second five-year certification next year. This effort should be strongly supported by downstream players such as Consumer Goods Manufacturers or retailers. 

You could support the sustainable supply chain by purchasing RSPO Smallholders Credits. Smallholders have enjoyed an improvement in their livelihoods by managing their plantation following RSPO standards plus  it will encourage more farmers to join the group to apply oil palm plantations sustainably.