Consultancy for Alternative Business Development through Seed Funding under the BIPOSC Project in Rantau Prapat, Labuhanbatu, North Sumatra (Implementation Phase)

Description

The Technical Assistance for Income Generating Activities (IGA) program is part of the Biodiverse Inclusive Palm Oil Supply Chain (BIPOSC) initiative implemented by SNV to support the development of a more transparent, sustainable, and deforestation-free palm oil supply chain. The program aims to strengthen the economic resilience of smallholder oil palm farmers by enhancing their capacity to develop alternative income sources that can support household livelihoods.

In recent years, the palm oil sector has faced increasing global attention related to environmental sustainability, deforestation, and biodiversity conservation. At the same time, many smallholder farmers who manage oil palm plantations have limited access to technology, financing, and sustainable market opportunities. These challenges become more significant during the replanting period, when farmers must replace aging oil palm trees and temporarily lose their primary source of income. Therefore, developing alternative livelihood opportunities is essential to maintain farmers’ economic stability during this transition period.

Through this program, SNV and its implementing partners provide technical assistance to farmer groups and cooperatives in developing productive enterprises such as cattle fattening and catfish farming. The activities include strengthening business management skills, financial literacy, group administration and record keeping, business plan development, and marketing strategies. The program also supports access to business capital through a seed funding scheme, which is managed by cooperatives using a revolving fund mechanism to ensure sustainable access to financing for farmer groups.

In addition to strengthening existing business initiatives, the program also promotes product diversification and the development of alternative commodities with strong local market potential. A market survey is conducted in several villages to identify promising business opportunities that can be developed by farmer groups, particularly involving women and youth. The results of this survey will serve as a basis for developing new business initiatives that are more responsive to market demand and local community conditions.

Overall, the program aims to strengthen the institutional capacity of farmer groups and cooperatives, enhance farmers’ entrepreneurial skills, and improve market access for community-based products. Through an integrated approach that combines capacity building, financial support, and market development, the program is expected to improve the economic resilience of smallholder farmers while contributing to the development of a more sustainable and inclusive palm oil supply chain.

Funding

This program is supported by SNV Netherlands Development Organization, with a program period from March 1, 2026 to March 2027, with total funding support amounting to IDR 1,000,000,000.