Guidelines for setting up a smallholder oil palm plantation

Introduction
In the context of increasing demand for palm oil and related environmental and social concerns about oil palm expansion, there is a demand for knowledge on how to increase the average palm oil yield per hectare in a sustainable way, thus increasing overall palm oil production without additional land use. In 2007 smallholders held 41% of the oil palm area in Indonesia and produced 34% of Indonesian oil palm fruits. The sheer size of smallholder engagement in palm oil production and their contribution to regional development indicates the need to investigate further the current and potential role smallholders can play in providing sustainable palm oil. This document is the set of guidelines that were provided as part of a study on the Ophir smallholder oil palm project. The Ophir project was part of the Government of Indonesia’s (GOI) Nucleus Estate Smallholder (NES) programme, and the study provided an opportunity to assess the development of an oil palm smallholder project over a 25 year period since its inception in the early 1980s till 2009. The NESP Ophir project is an 8,000 ha oil palm plantation, with 4,800 ha managed by smallholders and 3,200 managed by the nucleus estate.  The nucleus estate runs the milling facility and is mainly supplied by the smallholders and its own plantations. The project proved to be highly successful as smallholders maintained fruit bunch yields of between 22 and 29 t ha‐1 , thereby continuously outperforming the nucleus estate and many leading private sector oil palm companies. We embarked on this study as it was perceived that a review of this successful project would provide a wide range of insights into what determined the success of this smallholder oil palm project. This set of guidelines on smallholder oil palm development is based on the lessons learned in the Ophir and experience of the research team concerning smallholder oil palm development. The guidelines deal with the following issues: • Plantation establishment; • Plantation company responsibility; • Smallholder selection; • Extension services; • Government services required; • Plantation management; • Financial management; • Smallholder organisation. A clear lesson from the Ophir project is that pragmatism is key and although a set of guidelines provide direction, they should not be seen as the path to success. Under different circumstances strategies might have to be adapted. These guidelines however do provide a solid starting position and practical advice on several aspects in setting up sustainable and intensive smallholder oil palm plantations.