A worker shows palm oil fruits at palm oil plantation in Topoyo village in Mamuju, Indonesia, Sulawesi Island, March 25, 2017 in this photo taken by Antara Foto. (Antara Foto/Akbar Tado)

Riau’s Boarding Schools on Entrepreneurial Journey as Palm Oil Santripreneurs


JULY 28, 2021

Jakarta. Riau’s Islamic boarding schools —or commonly known as pesantren— are walking on an entrepreneurial journey as palm oil “santripreneurs”.

Last year, University of Indonesia’s Shariah Economics and Business Center (PEBS UI) and the Palm Oil Plantation Fund Management Agency (BPDPKS) launched the santripreneur program in Riau and other palm oil producing provinces. As the name suggests, the initiative aims to spur palm oil-based small-medium scale enterprises and cooperatives within pesantren


"Nurturing entrepreneurship will change the image of pondok pesantren in the public's eye. Pesantren will not only be seen as an institution that solely focuses on religious activities, but also one that can harness the local economic potential of palm oil," BPDPKS president director Eddy Abdurrachman told an online conference on Wednesday. 

According to Eddy, the obstacles faced by the smallholding plantations in pesantren are no different than those of the typical independent smallholders. They struggle with low productivity, and heavily rely on fresh fruit bunches. They have low bargaining power, and have to cope with limited direct access to market and commercial financing. Their utilization of oil palm biomass has also not been optimal.

"And for that reason, we should encourage [pesantren smallholders] to add value to their plantations by establishing a palm oil-based enterprise or cooperative. This is also one way to boost the farmers' prosperity," he said. 

"In the end, [santripreneurs] can help change the negative perceptions of the Indonesian palm oil industry into [something that] is eco-friendly and sustainable."

The PEBS UI-BPDPKS santripreneur program offers technical assistance and help open doors for new market access. They will also help Riau's pesantren produce potential palm oil derivative products to bring greater value. 

Amidst the Covid-19 pandemic, palm oil-based hygiene products such as hand sanitizers and soap are among the highly potential products to work on, PEBS UI head Rahmatina A. Kasri told the same conference. 

"We are aware that our program currently does not provide any capital, but rather focuses on giving technical assistance, market access, and partnership. As for the capital, we are hoping to work together with relevant stakeholders. For instance, Gapki [Indonesian Palm Oil Association] can give support via its corporate social responsibility [CSR] program — or perhaps other companies," Rahmatina said.

Indonesia is home to the world’s largest Muslim population. It also has 31,385 pesantren scattered across the archipelago. Of that number, about 44 percent pesantren have economic potential, government data revealed. National Statistics Agency (BPS) data also showed Riau’s palm oil plantation spanned a total 2.71 million hectares in 2018 — making them Indonesia's top palm oil producer.