A number of studies have indicated Indonesia’s success in substantially lowering its rate of deforestation. According to Government of Indonesia data, the annual rate of deforestation in Indonesia decreased from its highest level of 3.5 million hectares a year during 1996-2000 to slightly more than one million hectares a year from 2000 to 2006, with further decreases of 650,000 hectares of land in 2015-16 and 480,000 hectares in 2016-17.

Tightened government regulations including a permanent moratorium on forest clearing for plantations and logging, forest management reform, and prosecution of companies illegally clearing forests have been the main drivers of the decline. Other factors include increased transparency, partly with the help of real-time deforestation monitoring, and collaborative programs involving government, private sector, and community, such as fire-free village programs and jurisdiction-wide sustainability programs. Recognizing the continuing need for further deforestation reduction efforts, the significant decline thus far has allowed the strengthening of focus toward sustainable palm oil management.

One area of government focus is in the rejuvenation or replanting of smallholder palm farms that are expected to reduce the need for new agricultural land. Studies show deforestation from large-scale plantations in Indonesia is declining, but that deforestation outside of concession areas is still ongoing, albeit in limited area, driven mostly by smallholder farmers. The primary reason fueling the increase is the smallholders’ need to make ends meet by finding more land to plant additional crops, given their lack of knowledge on how to maximize the efficiency of their existing land.

The Smallholder Palm Oil Rejuvenation Program or Peremajaan Sawit Rakyat (PSR) was established to assist smallholder farmers to transition to increasing productivity through replanting on existing land rather than by expansion. Launched by Indonesian President Joko Widodo in 2017, the government program works in collaboration with palm oil-based companies in Indonesia to increase the productivity of independent smallholder plantations whilst continuing to reducing deforestation.