Protection Approach for Landscape Management - PALM

Supported by the Norwegian Government through its NICFI program, CPI is implementing The Production-Protection Approach for Landscape Management project, known as PALM, in Central Kalimantan, Indonesia.

This five year project is the third phase of the Central Kalimantan Production – Protection Initiative, which was also funded by the Norwegian Government.

The PALM project’s overarching goal is to demonstrate opportunity to make evidence-based adjustments to policy and businesses to spur effective public-private-people partnerships and to deliver socially inclusive, sustainable oil palm production in Central Kalimantan whilst retaining environmental values, particularly in identified high conservation value landscapes.

The project will deliver analysis to support a number of pilots using a landscape management approach to achieve sustainable agricultural production. The primary focus will be on palm oil. These pilots will be implemented in one or two selected districts in Central Kalimantan.

The landscape management approach allows public, private and community actors to identify the policy and business opportunities present in the agricultural value chain that could help them optimize both the economic and environmental value of land.

The project will culminate in a collaborative process to encourage the broader shifts in policies and investment behaviour into the direction of sustainable palm oil production in neighboring districts and other locations.

Why

Indonesia’s ability to deliver economic growth and emissions reduction goals (7% annual economic growth rate and a 29% reduction in GHG emissions by 2030, or up to 41% GHG reduction with international support) depend heavily on the way land and natural resources are managed to deliver socially inclusive development and growth outcomes. The agricultural sector accounts for about 15% of Indonesia’s GDP, and more than half of current greenhouse gas emissions come from the land sector.

Indonesia’s rapidly growing oil palm industry is one of the primary drivers of its emissions profile, while also being a key contributor to economic growth. Because even low yielding oil palm plantations are profitable, expansion of the industry has been dramatic.

Over the past decade, Indonesia’s national production of palm oil tripled, and currently the country has more than 8.5 million hectares of land are under oil palm cultivation. Central Kalimantan province plans to triple their oil palm planted area to 3,5 million hectares by 2020. It is also a province that contains 8% of the world’s tropical peatlands and a rich array of biodiversity.

In this third phase, the project aims to show that green growth in Indonesia is possible through intensive (high productivity) rather than extensive (expansion) agricultural and forestry practices.

CPI continues to partner with the University of Palangkaraya (UNPAR), local government agencies and private businesses to develop and test a jurisdictional business model for sustainable oil palm investment in Central Kalimantan that supports improved land use policies and economic growth.

This partnership is premised on four key assumptions

• Opportunity exists to grow the rural economy in Indonesia in a way that reduces costs and impacts (economic, social and environmental).
• Land use optimization is key – this involves shifting environmentally suitable, low productivity land into higher productivity uses.
• Increased productivity can be achieved at the same time as conserving scarce resources and environmental services, including through appropriate land zoning and strengthening of protection policies for high value ecosystems.
• A strengthened system of financial incentives that shares the benefits equitably will be key to realizing this potential.

Expected Results

The project aims to develop a sustainable oil palm investment model which will include both private sector and public policy reforms to provide economic, social and environmental incentives to increase agricultural production and protect ecosystems in parallel.

Through PILAR, it will generate science based evidence that development and protection can be achieved simultaneously. The policy recommendation deriving from that evidence will guide the policy reforms needed to incentivize business invesment in sustainable practices and enhanced protection of valuable ecosystems.

Partners

• The Indonesian Ministry of Finance is responsible in developing and implementing national fiscal frameworks, policies and mechanisms including taxes, subsidies and regional transfers.  Through the PALM project, CPI will provide technical assistance to the ministry to help them to analyze, develop, adopt and implement fiscal policies and mechanisms that will encourage sustainable high productivity oil palm and appropriate land allocation and management of high conservation areas.
• The Central Kalimantan Government is the project’s lead partner at the regional level. Central Kalimantan, one of nine REDD+ pilot provinces, has perhaps the most active portfolio of ongoing REDD+ activities of any province. The project aims to strengthen the technical capacity of the provincial government to conduct strategic environmental analysis and spatial planning.  Results from testing the business model on the district level is also expected to feed into policy processes on the provincial level.
• Palangkaraya Institute for Land-use and Agricultural Research (PILAR) is an independent research foundation and also a program within the University of Palangkaraya. CPI helped establish both under Phase 2 of this project in 2014 as a regional hub or center of excellence. It supports local experts, researchers, and students at UNPAR to conduct analysis and develop policy recommendations and advice on land use optimization for government and business in Central Kalimantan. The independent foundation also acts as the secretariat to the Central Kalimantan Production – Protection Working Group.
• Central Kalimantan REDD+ Protection - Production Working Group the working group was established by and reports to the Governor of Central Kalimantan. It includes key government, business and non-government stakeholders, including the provincial agencies for environment and forestry, agricultural plantations and planning, as well as UNPAR, representatives from local indigenous peak bodies, GAPKI (oil palm industry association), Sawit Watch and Kemitraan (NGOs focused on oil palm and governance). This group is the core group of policy-makers and business and community representatives that will make decisions on how to adopt policy recommendations from PILAR and the overall landscape pilot program strategy.
  
  
• Selected districts: One or two districts in Central Kalimantan will receive advice from PILAR, with support from CPI, to pilot a landscape management approach within their district, in partnership with business actors, as well as the provincial government and the Ministry of Finance. A scientific and inclusive district selection process has been completed indicating Kotawaringin Timur and Katingan as desired districts. Partnership with the districts will be formalized in the third phase of the project.
• Selected business partners: business partners will receive advice from PILAR, with support from CPI, on best practice investment and organizational models for sustainable, high productivity oil palm. They will test these approaches on the ground, including working with smallholder farmers in the district area to improve their practices and value chain integration. 

Activities under this Agreement were discontinued as of June 20^th 2019, upon request of the agreement partner.

In total, NOK 5 570 486 was disbursed to CPI.

The initial funding period 2016-2020 has been shortened to 2016-2019, with a total funding of NOK 7 900 000.