Adopt Best Agro-Management Practices and Streamlining Operation

Jakarta, Warta Sawit Indonesia -- Global palm oil production is dominated by Indonesia and Malaysia. These two countries, together, account for about 85 to 90 percent of total global palm oil production. In the long term, global demand for palm oil shows an increasing trend in line with the increasing global population which increases the consumption of food and cosmetic products that contain types of ingredients derived from palm oil.

There are, however, massive expansion of palm oil plantation has been claimed to be associated with deforestation, displacement of natural habitats, and unfairly blamed to cause haze-related air pollution in Southeast Asia cities. It has also been suggested as a major contributor to global warming through displaced carbon rich peat soils and wetlands purportedly used for oil palm cultivation.

As biggest world of palm oil producers, Indonesia and Malaysia have realized this issue. A land moratorium has been implemented, particularly on peatlands and rainforests. But in practice, the emphasis is too often placed on finding solutions to partial problems.

The efforts lack consideration of the long-term aspects of the system and do not represent sustainable development of the agro-food chain which demands transparency of data and information. It is therefore important to emphasis that all efforts should be more stakeholder orientated to adopting new technologies as an option and values.

When company make decisions on adopting new technologies, they must take into consideration two important factors, which are the challenge of sustainability and the challenge of traceability. They face a global society that demands transparency and a highly competitive global marketplace.

But modifying management that has been rooted for years of crisis is not easy. The real fact is palm sector in both Indonesia and Malaysia is developing extensively, yet plantation and producers are performing well below their potential, with yields lower than optimum.

Chief Executive Officer of eKomoditi Solutions Indonesia, Ferron Haryanto, argues that it is not easy for palm oil producers to realize this demand considering the complex flow in the palm oil business which involves millions of people.

“In facts, palm oil production processes from upstream to downstream constitutes big data management that is impossible to solve without a digital process involving artificial intelligence, automation system and sophisticated predictive analytics. Meanwhile, traceability demands the availability of complete data, starting from planting, maintenance, harvesting, initial processing, further processing to derivative products,” Ferron said.

Facts Finding Infield of Palm Oil Plantation

In the conventional management practices, there are several discrepancies and inaccuracies in the implementation of plantation operations. Conventional practices will hinder company performance and far from efficient in time and cost.

The following observations found in the field of palm oil plantation, as follows:

1. Ghost worker

Ghost worker schemes are perpetrated by payroll employees who either create fake identities that is completed with fake ID Card, address, phone number, etc., or issued payment to employees who have resigned or retired from the company and divert the payment to themselves. Whatever kind of ghost workers, it is a grand scheme to steal money from a company.

2. Unmonitored leftover fruits

There are losses of production due to oil palm field’s material handling. Activities that may raise the losses are harvesting and transportation, which may cause bruise and damage to fruit. Leftover fruits happened on FFB within material handling, start from FFB falling when harvested, loading up to truck bin, and transporting from field to loading ramp. Unmonitored leftover fruits properly cause significant losses.

3. Ghost bunches

Ghost Bunches refers to the inequalities in the amounts of fruit production in the field and in the mill. Ghost Bunches were among the many aspects that affect to yield (EOR) and properly cause significant losses.

4. Uncontrolled materials usage

Uncontrolled materials usage of fertilizer or herbicide will impact on operational budget. Material usage control is needed to ensure the provision of required quantity and quality in the minimum amount of budget, and effective in maintaining the production schedules, meeting the market demands and avoiding excessive investment in inventories.

5. Delay activities report

Fresh fruit bunches (FFBs) harvested should be delivered immediately to the mills within 24 hours. Doing so results in a higher yield and quality of CPO production. The faster the fruit is crushed, the less FFA is formed, the better the yield and quality of CPO. FFA is detrimental to the yield and final quality of the CPO production.

6. Uncontrolled fruit sorting

Grading is an activity of fresh fruit bunches sorting as one of the production controls both in quantity and quality. Grading activities are carried out at the loading ramp station by sorting fresh fruit bunches in accordance with predetermined grading criteria and standards. As for the standard fruit grading carried out, among others: unripe fruit, ripe fruit, over ripe fruit, long stalk, abnormal fruit, and empty bunch.

7. Unmonitored working time and location

Job assignment location error will impact on upkeep and job assignment progress reports. Companies need a geolocation mapping services to monitor infield activities and track mobile employees. The web service is intended for administrators, offering an up-to-date report of workers' locations and status updates, while the mobile application allows the employee in the field to accept new jobs and update their progress report.

Best management practices will streamline this complex process, which in turn, reducing the use of fertilizers, pest control management, fire detection, detection of unproductive plots, and increasing yield in every plot of palm oil plantation. As the consequences on the output side would be a more of FFB (fresh fruit bunches) yield with less yield risk. In the short run, this would result in a higher profit per hectare.

In conclusion, in a world of rapid and deep change, all of us must look at what we need to do to be sustainable and traceable. Palm oil companies need to look at how sustainable and traceable they are in terms of their own plantation operations. They cannot say, for example, that they want to preserve smallholder agriculture, conservation for wildlife, protects customary rights, implements of NDPE (No Deforestation, No Peat, No Exploitation) policies, etc., without providing traceability system to support it. Liberalized market forces will give exactly the opposite result.

As the final conclusions, palm oil company will only be sustainable if it is capable of renewing itself by traceability through data to the sources. This means palm oil company should adopts best management practices and streamlining its operation for sustain maximum profits in a vibrant global economy.