From the very beginning of Royal Golden Eagle (RGE), when it was Raja Garuda Mas back when it first started in 1973, it was seen as a corporation that fully supported and engaged with the natural resources utilisation industry. RGE’s operations have always been closely related to farmers, and partnerships with these palm oil farmers are part of RGE’s operations and they are ready to support the needs of farmers, who they value as their own strategic partners.
Asides from the palm oil industry, RGE deals in a variety of different industries through its subsidiaries, such as special cellulose, pulp and paper, oil and gas, and viscose fibre. One of RGE’s subsidiaries engaged in the palm oil sector is Asian Agri, who have consistently established partnerships with palm oil farmers from the past until now. The partnership that was carried out was mutually beneficial. Asian Agri is ready to support all the needs of farmers to improve the profits of their plantation or improve quality of life.
Asian Agri’s collaboration with farmers has been carried out from the early days of when they were founded in 1979. Nine years ago they pioneered a partnership with oil palm farmers by joining the Perkebunan Inti Rakyat-Trans (PIR) programme held in Jambi and Riau Provinces. In the 1980s, the Indonesian Government tried to equalise the population, and initiated the transmigration programme by moving residents from Java to Sumatra and Kalimantan.
The Government of Indonesia invited the private sector to take part in launching the programme and invited big companies to work together with transmigrants. This invitation was welcomed by Asian Agri and they have been participating in the programme since 1987, and are listed as one of the pioneers of its application in Indonesia.
The PIR-Trans concept places Asian Agri at the core and palm oil farmers as its plasma. As a core company, the RGE business unit is obligated to support the development of farmers and the forms of support varies. One basic requirement is that Asian Agri must be ready to build factories that are able to accommodate and process the farmers’ plantation produce. This was readily and efficiently done with the construction of factories in the provinces of Riau and Jambi.
In the PIR-Trans programme, the government provides living capital to transmigrants. They were also provided with two hectares of land and a housing plot, and will be provided with other life necessities in a few years time. The transmigrants cultivated their land into plantations and when they joined as part of Asian Agri’s core farmers, they then planted palm oil trees. However, for many of these transmigrants, planting palm oil is a new experience, therefore the role of core parties such as Asian Agri is vital. They support the development of farmers by providing assistance in managing the palm oil plantations.
The assistance provided by Asian Agri starts from the very beginning of processing the land into a plantation. Once the process is ready, seeds, fertilisers and pesticides are provided. Prior to this, Asian Agri must prepare a special team to help. The team must consist of a complete structure ranging from General Manager, Manager, to Assistant Manager, and they must have the competence to help the development of palm oil plantations.
Everyday, this team heads to the fields to provide technical assistance and training. The training provided is not only about methods to maximise production, but also about sustainable management of plantations. This includes protecting areas of high conservation value, preventing and controlling forest fires, using organic fertilisers and so on.
Supporting farmers’ life development
In providing support for palm oil farmers, Asian Agri does not hold back. They prepare for it from the beginning to the very end, which can be seen from the collaboration that they build with the palm oil farmers. As the core, Asian Agri collects the farmers’ harvest and buy it at prices according to standards set by the government. With this system, farmers get a certain source of livelihood. Asides from that, this subsidiary of RGE also helps develop the infrastructure needed by farmers. An example of this development is road construction, which is very important as it is needed by farmers to transport their plantation products.
Asian Agri also rolled out other programmes to develop the lives of farmers and carried out various activities to make farmers have alternative livelihoods. These programmes started with the Trainer of Trainees (TOT), in which Asian Agri seek to discover the potential of farmers who were focused on the field of agribusiness. They organised training related to horticulture, and the farming of cattle, poultry, catfish, and tilapia.
Another programme that Asian Agri has that is specifically for cattle farming is SISKA, which is perfectly in synergy with palm oil. Through the SISKA programme, Asian Agri encourages farmers to utilise the produce from their palm oil plantation for cattle ranching. For example, they can use palm oil by-products or waste in the form of oil palm fronds, palm mud, fruit juice fibres, and palm oil cake which can be used as animal feed.
In addition, Asian Agri also teaches farmers to use cow dung as biogas. Cow dung can be used as fuel for household use and manure for the farmers’ palm oil crops. Asian Agri does not only give training for these farmers, but they also provide other support by providing digesters, hoses and plastic containers. Asian Agri also encourages farmers to want to raise catfish. Palm oil farmers in Batu Anam Village in Riau started raising catfish since 2013 and as a result, they are now able to become successful catfish breeders with sufficient results to supplement their income.
Right up till now, the RGE business unit has cooperated with farmers covering 60 thousand hectares, with not less than 30,000 families that are spread across eleven plantations in Riau and Jambi. But now Asian Agri has expanded its support scope to independent palm oil farmers with a core-self-help concept.
This subsidiary of Royal Golden Eagle has targeted a partnership with independent smallholders reaching an area of 40 thousand hectares, and this number will be increased to 60,000 hectares in 2020. These steps demonstrate the seriousness of the RGE in supporting farmers, and with this partnership, RGE continues to support the farmers in improving their quality of life.