Asian Agri and Plasma Smallholders

Asian Agri was recently awarded the “Best Community Program” at the 7th Global CSR Summit in Yogyakarta, Indonesia. It has embarked on the successful partnership with their plasma smallholders since 1987, at the behest of Sukanto Tanoto, one of Indonesia’s renowned self-made entrepreneurs.   

In 1980s, Indonesia faced several social challenges mainly due to over-population in Java Island. Half a million families were moved from the densely populated Java to less densely populated islands of Sumatera, Kalimantan to achieve a more balanced population density, under the Transmigration Program. 

Indonesia’s leaders had a vision that the agriculture sector, including oil palm plantation, would play a major role in the development of its economy.  The idea was to integrate more Established Plantation Operations including processing facilities and infrastructures with smallholders’ plantations called PIR-Trans (Perkebunan Inti Rakyat-Transmigrasi). The PIR-Trans program is a long-term commitment between the plantation company and the transmigrated communities.  Few companies were willing to adopt the program. 

Sukanto Tanoto thought differently from the other companies’ owners. He knows that for a company to be successful, the surrounding community and the country must be successful. So he & Asian Agri became a pioneer to participate in the PIR-Trans program. As the transmigrated communities used to be paddy farmers, and therefore unfamiliar with crop plantations such as oil palm, Asian Agri began by teaching them plantation skills and turning the empty land given by the government into oil palm plantations.

Today, this community partnership program is one of the most successful partnerships that lifted the lives of the transmigrated communities out of poverty. Their income now is significantly higher than regional minimum wages & GDP per capita of Indonesia. Asian Agri has put into practice Sukanto Tanoto’s philosophy of Good for the Community, Good for the Country and Good for the Company and by doing so, transformed the lives of the 29,000 plasma smallholders.