Dutch Cooperative Model Inspires Indonesian Farmers
23-12-2024Indonesian farmers are taking bold steps toward greater control over their livelihoods, inspired by lessons from the Dutch cooperative model. With support from Agriterra, seven primary cooperatives in palm oil farming are working to establish the first farmer-owned palm oil mill in Indonesia. This move could revolutionise their role in the value chain, enabling them to process and sell palm oil directly instead of relying on middlemen. The potential benefits are clear: higher profits, stronger market positioning, and improved sustainability through better coordination, such as staggering plantation renewal to prevent income gaps.
Edwin Michiels, Portfolio Holder for Nature, Climate & Energy at LTO Nederland and Director of Cooperative Affairs at Vitelia, played a key role in this transformation. During a recent trip to Indonesia as an Agripool expert, Michiels delivered training on member commitment, addressing farmers' concerns about the risks of collaboration. “The main thing missing was confidence that their investment was safe,” he explains. The farmers were afraid of losing control and savings. Michiels helped them see that they jointly own the new palm oil mill. “So you are investing in your own business,” he emphasises. Drawing on Dutch agricultural history and his own experience at Vitelia, Michiels demonstrated how collaboration and shared ownership have fueled success in similar contexts, inspiring confidence among the farmers.
Overcoming Challenges
While progress is promising, challenges remain. Indonesian law prohibits direct cooperative mergers, complicating the creation of secondary cooperatives. Despite this, Michiels is optimistic. “The understanding that collective efforts lead to greater success is already there,” he noted. In addition, Agriterra's local staff actively support the cooperatives and offer guidance to make them stronger in governance, for example.
Global Perspectives
For Michiels, the trip was both enlightening and perspective-shifting. “Experiencing how cooperatives operate in different contexts highlights the resilience and resourcefulness of farmers, while also reminding me of the advantages we often take for granted in the Netherlands,” he shared. “This is why I deliberately take a week off every year to go on the road as an Agripool expert. It is incredibly valuable to meet people, tackle challenges together and discover a side of a country you would never see otherwise. It's a privilege to contribute in this way.”
Paving the Way for Sustainable Palm Oil
Agriterra’s upcoming 2025 initiative in Central Kalimantan will further enhance the sustainability of the palm oil value chain by:
- Training farmers on sustainability and traceability to achieve RSPO certification.
- Strengthening cooperative governance, market access, and advocacy capacity.
- Assisting local governments in closing policy gaps on sustainability and traceability.
This comprehensive approach aims to equip cooperatives and smallholder farmers with the tools needed for a more sustainable future in palm oil production.
