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.

Sukanto Tanoto and Asian Agri, The Leading Palm Oil Industry

Asian Agri is part of the Company incorporated in RGE group belonging to Sukanto Tanoto. Asian Agri is a manufacturer of CPO (Crude Palm Oil), which was established in 1979. Asian Agri has not CPO producing factories but also oil palm plantations. Currently, it has a plantation area of 160,000 hectares or as many 28 oil palm plantations and 19 palm oil mills. Asian Agri's production capacity has now reached 1 million tons per year.

Nearly all of the Asian Agri workers are from the families that followed the transmigration program. In 1987, the company became a pioneer in helping the government to run the program. Currently, the number of families who have participated in the program and work in Asian Agri is 29,000 families. These families manage 60,000 hectares of oil palm plantation of the total 100,000 hectares owned by the company. The families are spread throughout the plantations in Riau and Jambi. Currently, it has employed approximately 25,000 employees.

Sukanto Tanoto and environmental focus of Asian Agri

Asian Agri is part of the companies in RGE group that only focuses not only on gaining profit, but also on the surrounding environment. This is in accordance with their philosophy of 3P (People, Planet, Profit). The serious commitment of the philosophy is particularly shown from the awards and certificates related to the environment.

Seeing from the number of plantations, palm oil mills and employee owned by Sukanto Tanoto, Asian Agri has been made it one of Indonesia's largest palm oil companies. This company’s sensitivity to global issues delivers successes in getting various awards and certificates in the environmental field. This reinforces the company to become the leading palm oil producer.

Certification in environment-related aspects

In 2007, Asian Agri obtained ISO 14001 in the environmental aspect for the entire factory. While the Asian Agri Institute of Education in Pelawan, Riau obtained ISO 9001 certificate for quality. In 2012,  through PT Inti Indosawit Subur, the company became one of the largest palm oil producers that had been certified with ISCC (International Sustainability & Carbon Certification). This company’s core of Indosawit has a total production of 126.000MT CPO with the world palm oil price of US $ 20-US $ 30 per ton.

ISCC is the first international certification, which aims to prove the sustainability and efficiency of the company in producing all kinds of products from biomass in relation to the greenhouse effect. Obtaining this certification means that Asian Agri is able to produce CPO based on the EU Renewable Energy Directive Standards. Sukanto Tanoto has proved his commitment for the environment.

Tanoto Foundation Held Teacher Training Program

We should highly appreciate Mr. Sukanto Tanoto’s efforts in developing quality educational system in Indonesia through wide arrays of programs. We know that the self-made Indonesian business tycoon shows much love and concern towards the education in Indonesia, particularly because he, himself, was unable to attend higher education in formal institution when he was young. Not only that, Mr. Tanoto also believes that education is the key to success and it can break the chain of poverty.

With this regards, Mr. Tanoto through Tanoto Foundation emphasizes the importance of education by bringing resources from private sector to assist government’s program in developing quality education. It is to make education accessible to the entire children, so that Indonesia can be reckoned among leading countries is the main goal of the foundation.

Education Program by Tanoto Foundation

The recent philanthropic activities by Tanoto Foundation included providing training to Indonesian teachers. This nonprofit organization along with its corporate partners, recently held teacher training in public school of SDN 149/I Lebung Kato Ati. The teachers received the best assistance in developing and fostering children reading habits and literacy. Located in Desa Danau Embat, Batang Hari district, Jambi province, the teacher training programs involved 20 local teachers.

Developing reading habit as early as possible is proven vital in shaping children ability to think independently, creatively, and structurally. It has been known that parents at home should encourage their children to read since the childhood. Reading book together and playing games can make fun activities, as children will deal with language everyday in their life. Still according to research, a reader will become a successful learner, who will likely be successful in their career and can contribute to the country’s development in general.

Teacher training program for better education

In the teaching program event held by the foundation, the teachers are assisted to help children to be more engaged in the reading process. In addition, the presenters also demonstrated enhanced storytelling skill that made children listen well and got interested. The teachers also learned how to awaken the children’s imagination by means visual aids, promoting reading-centered culture, and using any means to improve children’s interest in reading and writing.

Such teacher empowerment program is aimed to give the teachers better quality in delivering the knowledge to the students, to make sure that the teachers have hard skill and soft skills to cope with the children, and to manage them in a better way. By holding the program regularly, Sukanto Tanoto and his foundation hope to give accessible better quality to the children.

Tanoto Foundation Partnered with Smallholders for Better Living

It has become a common knowledge that SukantoTanoto is a great person with great business and great heart. Great enough to help the people of Indonesia, he was born at a place where he started his business to achieve better living and get quality of services. Not only does he care about the running of his business, Mr. Tanoto also pays high concern towards the development of people in Indonesia, including in education, economy, and social services. Through the foundation’s philanthropic activities, so many programs have been held, lots of facilities built, and trainings to assist local farmers in achieving a better quality of life.

Smallholders Honored with Award from the Government

Sukanto Tanoto through Tanoto Foundation is not only focusing on educational sector, just as is frequently reported, but it also emphasizes the importance of empowering local people, whom, we know, are unable to reach maximum facilities provided by the government. It is because the rural location is somehow making them difficult to be ‘spotted’, but Tanoto Foundation catches the issue and helps to solve it, instead.

Mr. Tanoto believes that local community empowerment is one of crucial points to reduce poverty and improve living quality in Indonesia. One of the prominent programs recognized by the government is the plasma smallholders program. It is one of the company’s efforts to perform good stewardship by means of cooperating with small-scale farmers around the business area.

The program is practiced by Asian Agri, one of RGE Group companies, with $15 billion assets. The company works together with the smallholders in implementing the best farming practice to allow the local farmers to develop sustainable environment and produce high yielding crops. Through this program, five plasma smallholder cooperatives have received an award from the government, regarding the significant achievement in agricultural sector. The award is presented by the Minister of Cooperatives and Small and Medium Enterprises himself, namely, Mr. Syarif Hasan in 2013.

Asian Agri Builds Partnerships with Many Local Cooperatives

In addition to the report, among three of those five cooperatives, namely KUD Jaya Makmur, KUD Sumber Makmur, and KUD Tani Maju are the partners of Asian Agri. Sukanto Tanoto through the company teaches farmers about innovative seedling technique and agricultural instruction. The company allows the farmers to learn about pest control techniques.

As a part of the partnership with the smallholders, Asian Agri also develops infrastructure for the local communities. It aims to create independent agricultural producers. Until today, more than 29,000 families of the smallholders have been assisted by Asian Agri. Mr. Sukanto Tanoto will continue to improve the program by developing one-third of the company’s land along with Plasma and KPPA smallholders.