Optimizing Public Fund to Finance Smallholder Plantations for Sustainable Palm Oil in Indonesia.

Considering the significant impact, but vulnerable position occupied by the smallholder farmers within the Indonesian palm oil industry, ensuring their access to a reliable source of finance is crucial to ensure the sustainability of palm oil in Indonesia. Public funds are one of the resources that can be used to provide this kind of financial support for palm smallholders. Therefore, it is important to ensure accessibility of smallholder's farmers to public funds. However, the government has not been able to effectively leverage available public financing tools and programs in ways that generate meaningful impact to address productivity and environmental sustainability challenges. This study identifies major gaps in available public financing tools through certain common palm oil industry cases, followed by a deep analysis on the implications of the gap over institutional public financing strategies and major beneficiaries, particularly to address smallholder farmers. To address these challenges, this study also tries to propose three actionable solutions such as better enforcement of land certification and use permit, maximizing ISPO as an industry sustainability standard, and developing a more consistent smallholders typology that can refocus public financing strategies effectively to achieve Indonesia's sustainable palm oil industry goals in the long run. [ABSTRACT FROM AUTHOR]