Indonesia prioritizes renewal of aging palm plantations to lift yields
Indonesia is strengthening the upstream palm oil sector through replanting, better cultivation practices and regulatory review. The program targets a large yield gap between industrial and smallholder estates while improving traceability, land legality and ISPO compliance.
Government shifts attention to the upstream sector
Indonesia is prioritizing the renewal of aging and damaged oil palm plantations as it seeks to increase productivity and protect future supplies of crude palm oil. The Coordinating Ministry for Food Affairs is also reviewing regulations considered to be holding back production, yields and farmer welfare, ANTARA reported.
Widiastuti, deputy for food and agricultural business coordination at the ministry, said a stronger upstream base was necessary to support processing industries. The government’s approach combines replanting with good agricultural practices, or GAP, rather than relying primarily on additional cultivated area.
Aging trees and low yields remain central challenges. According to ministry data cited by ANTARA, large-scale plantations produce about 4-6 tonnes of CPO per hectare annually, while smallholder plantations yield approximately 2-3.5 tonnes. National CPO productivity reached 3.606 tonnes per hectare in 2025, up from 3.529 tonnes in 2024, according to the Agriculture Ministry’s Directorate General of Plantations.
Damaged area highlights the replanting challenge
The government recorded 665,112 hectares of unproductive or damaged oil palm plantings in 2025. Renewing this area is intended to sustain plantation productivity and maintain the flow of raw material to downstream industries, which include oleochemicals and biofuels.
Progress under the smallholder oil palm replanting program, known as PSR, remains one measure of implementation. By 27 July 2026, technical recommendations had been completed for 23,688 hectares. Authorities are accelerating the identification of eligible recipients, verification of plantation land and technical assistance to improve delivery of the program.
Replanting creates a near-term production constraint because replaced trees require time before they become productive. However, the substantial yield gap between smallholder and large-scale estates indicates that better planting material and farm management could raise output from existing land over the longer term. This makes execution speed and support for farmers important for both household income and national supply.
Seeds, technology and farm management
The Agriculture Ministry is reinforcing replanting with measures including balanced fertilization, pest and disease control, improved water management, mechanization and digital cultivation tools. It is also promoting certified high-yielding seed.
Seed selection is particularly consequential because an unsuitable choice can affect plantation performance for 25-30 years. The government therefore places quality planting material, technical support and optimization of existing plantation land at the center of its productivity strategy.
The policy seeks to lift production without separating yield improvements from environmental and governance requirements. This is relevant to processors that need dependable feedstock, but also to smallholders whose ability to adopt certified seed and recommended cultivation methods may determine whether the national yield gap narrows.
Sustainability linked to market access
Indonesia is pairing agronomic measures with efforts to settle land-legality issues, strengthen supply-chain traceability and apply the Indonesian Sustainable Palm Oil standard, or ISPO. Widiastuti said better upstream governance would make globally traded Indonesian commodities easier for international markets to accept.
That link gives the replanting program a commercial dimension beyond production volumes. Traceable plantations with clearer land status and recognized sustainability practices can help exporters and processors respond to buyer requirements, while weaknesses at farm level can pass through the entire supply chain.
Palm oil remains important to Indonesia’s food and energy objectives and supplies raw material to the oleochemical and biofuel industries. The government’s plan therefore rests on two connected goals: increasing output from land already under cultivation and improving the governance needed to preserve access to international markets. Results will depend on how quickly technical recommendations translate into completed replanting and whether smallholders receive sufficient support during the transition to productive new trees.
