The Replanting Problems of Plasma Estates in the Indonesian State-Owned Oil Palm Estate: A Case in Sanggau Regency, West Kalimantan Province

Around 1980 the Indonesian government launched a program of oil palm plantation development led by state-owned plantation enterprises with some project finance. The program was named Nucleus Estates and Smallholders (NES) Projects and was funded by the World Bank and Asian Development Bank. In the early 1980s some state-owned enterprises constructed several oil palm estates in West Kalimantan Province under the NES scheme, almost all of which were located in Sanggau Regency. These estates are currently facing replanting problems, since the oil palm trees there are 25 to 30 years old and inevitably less productive. In the estates owned by smallholders, “plasma farmers” who have their estates near the nucleus estates owned by plantation companies, the replanting problems are more serious than company-owned plantations because of smallholders’ difficulty with financing.