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Independent Economy: Alternative Income for Independent Smallholders

Doc. of. SPKS for InfoSAWIT/Independent smallholders’ training for independent economy.
Independent Economy: Alternative Income for Independent Smallholders

InfoSAWIT, JAKARTA – The opinion saying that palm oil plantation expansion to boost income is put aside after crude palm oil (CPO) gets cheaper. The smallholders should get the alternative to survive by developing independent economy.

In the last years, the smallholders get more difficult to predict the economy for it could be better or worse in price. 2018 and 2019 were the samples. The fresh fruit bunch was so cheap and they had no desire to harvest their plantations.

Because of those, they needed to get the alternative to survive and develop the independent economy, such as, non-oil business chance to increase the productivity from their plantations. But it is not easy to realize because it needs financial institution to help them within credit system which are hostel to them

Bank is one of many financial institutions in Indonesia that may give fund credits. But it is difficult for the smallholders to get because in one side, they should give the guarantee (land certificates) to the bank while their certificates are in the company because they still have debts in their plasma plantations.

Then they consolidated their ideas from the bottom, collected their own capital. The goal is to make the place for the strong and independent economy and could support their innovation. They realized that the innovation is in their hand but it needs big capital.

The confused ones gathered and discussed their future in Village of Tanjung Benanak, Sub district of Merlung, District of Tanjung Jabung Barat in 2011. After having debates, they agreed to make gabungan kelompok petani (Gapoktan) which was initiated by five men. Gapoktan turns to be koperasi simpan pinjam (KSP). Until now it has 532 members in the transmigration villages,, such as, Tanjung Makmur, Bukit Harapan, Lampisi, Cinta Damai, and some members derive from the labors of PT Asian Agri and PT Seruni.

The main goal of the KSP is to bridge the smallholders to get financial helps and create the independent and better ones sustainably. To be the member, everyone should have the main safe about Rp 500.000 and the monthly safe about Rp 50.000

Since it was founded until now, their safe has reached Rp.7.606.525.710. To activate the circulation, the coordinators of KSP develop the business to tourism sectors by making swimming pool. KSP also prepares the permanent housing to be the office to ease the works of the institution.

In the Laws No. 19 / 2013 about the smallholders’ protection and empowerment, it is clearly regulated that the banks should give easiness of procedures to the farmers (smallholders) (to get fund). But the facts, many get the difficulties to get the fund though within small interests, through KUR (Kredit Usaha Rakyat). To be honest, the farmers (smallholders) want the fastest way (proposing and getting the fund is in the same day).

Based on the issue, KSP Karya Mandiri did breakthrough by giving easiness to the farmers to get the loan without complicated bureaucracy. Many plasma smallholders from the transmigration villages within bad infrastructure become the members. Their reason is that the service is fast and effective. They also get SHU (Sisa Hasil Usaha) in the end of year about 9% per member from their safe. In every single month KSP Karya Mandiri accepts the new members who are always smallholders in average. In 2019 there were 46 new members.

KSP Karya Mandiri has the mainstay products to the members within the productive loan, such as;

  1. The loan is about to increase the palm oil production, such as, buying fertilizers, herbicide, improving the agricultural infrastructure, such as, path, and others.
  2. The loan is to construct house of renovate house.
  3. The loan is to the small scale - business capital for the smallholders.
  4. The loan is to do replanting program.
  5. The education of the children, starting from kindergarten to university (there have been 30 smallholders’ children going to school). Maximally, the loan is rp 50 billion and minimally Rp 5 million. The members of KSP have been 532 smallholders. (T2)

Source: Focus Majalah InfoSAWIT, March 2020