Calculate The Profits from Palm Oil – Cow Integrated Program

Calculate The Profits from Palm Oil – Cow Integrated Program

InfoSAWIT, JAKARTA - For plasma smallholders get mediocre result in their lives, they would do anything to get other income to increase their quality of lives, such as, breeding cows in the plantations. Their areas are the alternative ones to develop the new regions to breed cows.

The livestock in the palm oil plantation is well-known as palm oil – cow integrated program. Not many companies do develop the program. But the plasma smallholders independently implement the program.

Some smallholders’ groups got the number one - help (cow) from the regional government and big companies within the condition, if the mother gives birth, the calf would belong to the first breeder, and the next breeder should give to other breeder and so on, until the government or big company grants the cow mother to the groups.

Some smallholders who have better economy would run the program independently. The good cow would be personally bred in their plasma plantation.

Some plasma smallholders succeeded the program in some regions. The breeding is by releasing the cows in their plantations because source of food – the grass – is available.

There are 8 advantages for the smallholders who implement the palm oil – cow integrated program, the first is to diversify the sources of production; the second is to reduce the business risk because of production factors.

The third is to hire workers efficiently; the fourth is to use production input efficiently; the fifth is to reduce the production costs; the sixth is to reduce the chemical usage and other source of other food.

The seventh is to realize the sustainable ecology system, it would not pollute; and the eighth is to increase the income for the family.

Breeding cow would relatively increase the income of the smallholders after 1 to 2 years to go. Their income would increase, as follow,

It is assumed that the palm oil plantation produces 20 tons/hectare (ha)/year), the monthly production is 1,7 tons/ha = Rp. 2,55 million/ha/month. The gross income minus bank credit = Rp. 1,785 million/ha/month the expense for the plantation = Rp. 0,73 million/month, the plasma smallholders’ income = Rp. 1,055 million/ha/month

The result of breeding cow/year = Rp. 15 million/cow/year, the cow nursery = Rp. 0 because the cows are released in the plantation, the smallholders’ income = Rp. 1,2 million/cow/month

If the plasma smallholders have 2 ha and still pay bank credit and 2 cows, they would get Rp. 4,5 million/month.

While the plasma smallholders who fully paid the bank credit would get Rp. 7,05 million/month

Based on the assumption, the program is good to do. It could make the smallholder better in economy.

Ahmad Hulaimi*

*) Palm oil plantation practitioner/ Regional Head at private palm oil plantation

Source: InfoSAWIT, June 2020