North Sumatra Palm Oil Project Boosts Sustainability, Profit

Musim Mas Group, the Livelihoods Fund for Family Farming (L3F), SNV Indonesia, and World Agroforestry (ICRAF) have partnered over the last three years on the Biodiverse & Inclusive Palm Oil Supply Chain (BIPOSC) project to strengthen the knowledge and skills of independent oil palm smallholders throughout the country. The collaboration aims to enhance sustainability and promote inclusivity within the palm oil supply chain.

The BIPOSC project, launched in 2021 in Labuhanbatu, North Sumatra, is  integrating regenerative agriculture techniques to address environmental concerns while improving farmer profitability.

Over 1,000 independent smallholders have already received training, applying advanced agricultural methods such as bio-input application, mulching, cover crop cultivation, and integrated pest management across 1,000 hectares. These practices significantly reduce the use of chemical pesticides and fertilizers, making palm oil farming more sustainable.

A key driver behind BIPOSC’s success is a pioneering composting facility run by the Labuhanbatu Independent Oil Palm Smallholders Association (APSKS LB). The facility produces up to 150 tons of compost monthly, providing members with affordable, high-quality compost at half the market price. In its first year, the facility produced 588 tons of compost and generated over IDR 421 million in profit.

With independent smallholders expected to manage 60% of Indonesia’s palm oil plantations by 2030 (up from 41%), the BIPOSC project could have a transformative effect on the palm oil industry. By combining environmental sustainability with economic viability, the initiative provides a blueprint for other palm oil producers to follow.

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Tags: Musim Mas Group, Livelihoods Fund for Family Farming, SNV Indonesia, World Agroforestry, Biodiverse & Inclusive Palm Oil Supply Chain, palm oil, project, oil palm, Sustainability, smallholders