Asian Agri Partners Smallholders Honored with Award

Sukanto Tanoto‘s philanthropic activities not only cover the education sector, but also cover the empowerment of the local communities because he believes that this is crucial in helping to reduce poverty in Indonesia. One of the most obvious empowerment activities is done through Asian Agri which falls under the corporate umbrella of RGE Group, the $15 billion global agribusiness and forestry products company founded by Indonesian businessman Sukanto Tanoto. Tanoto implemented the plasma smallholders program as part of his company’s efforts to practice good corporate stewardship by working directly with small farmers in Indonesia.

Asian Agri, a company under RGE Group founded by Sukanto Tanoto, partners with smallholder palm oil farmers to implement best farming practices to ensure sustainability and high yielding crops.

In 2013, five plasma smallholder cooperatives in the province of Riau, Sumatra, Indonesia, received an award recognizing their outstanding agricultural achievements. Syarif Hasan, Indonesia’s Minister of Cooperatives and Small and Medium Enterprises, presented the farmers with the award on the occasion of the country’s 66th Cooperative Day, celebrated annually on July 12.

Three of these cooperatives—KUD Jaya Makmur, KUD Sumber Makmur, and KUD Trani Maju—work in partnership with Asian Agri, one of the leading producers of palm oil on the continent. Asian Agri focuses on providing its partner farmers with seedlings and with instruction in agricultural and pest control techniques. To date, Sukanto Tanoto has directed Asian Agri to assist some 29,000 families of smallholders connected with the local transmigration program, and an additional 25,000 independent agricultural producers, all as part of his initiative designed to empower local farmers as they work to develop the infrastructure of their own communities.

For example, KUD Sumber Makmur, located in the region of Pelalawan, is now among Riau Province’s most successful cooperatives. Sumber Makmur, founded in the early 1990s and consisting of some 180 families who make their living through agriculture, currently notes assets totaling 18 billion rupiah, or more than $1.5 million U.S. dollars.

Asian Agri’s palm oil production capacity currently stands at one million tons of product, and its plantation area encompasses 160,000 hectares. As part of its emphasis on maintaining mutually beneficial partnerships with smallholders, the company has developed more than one-third of this land in cooperation with its Plasma and KKPA smallholders, who enjoy an income that far exceeds that of minimum-wage farmers in the same region.