Our field officers providing guidance to our smallholders in North Musi Rawas, South Sumatra, on the use of Integrated Pest Management as part of sustainable palm oil governance. SMALLHOLDER ENGAGEMENT AND LIVELIHOODS (GRI 3-3) With smallholders cultivating over 40% of Indonesia’s palm oil land, the industry plays a vital role in poverty reduction, improving rural livelihoods and narrowing the urban–rural wealth gap. Given this critical reliance, their inclusion in sustainable palm oil production is essential. IndoAgri is committed to meeting the government’s FPKMS12 requirement of allocating at least 20% of plantation area to smallholders. We have achieved this in most locations and will increase compliance with upcoming developments in East Kalimantan and South Sumatra. Through the programme, IndoAgri supports the prosperity of communities surrounding our operations. In 2025, we provided training and supervision for smallholders in collaboration with local authorities, ensuring best practices in estate management and FFB harvesting. We also supplied inputs such as fertiliser and seeds in North Sumatra, supported potato farming and small business opportunities in West Java, and assisted brown sugar producers in East Java. While these initiatives strengthen local livelihoods, we continue to face challenges, including resistance from some farmers who prefer land allocation under the programme and incidents of fruit theft. Encouragingly, these incidents have declined over time as our engagement efforts have gained traction and our community partnerships have deepened. FFB prices are set by Indonesia’s Agriculture Department (Dinas Perkebunan) with input from companies and farmers. This reduces price volatility. IndoAgri supports smallholders by providing subsidised, high-quality seeds. 12 The FPKMS (Fasilitasi Pembangunan Kebun Masyarakat Sekitar) is an Indonesian government initiative aimed at empowering communities around plantation concessions by allocating at least 20% of plantation company-managed land to nearby communities or, where land is limited, requiring participation in productive business activities such as palm-cattle integration or food crops. 43 Indofood Agri Resources Ltd. Sustainability Report 2025 Sourcing Appendix Product Community People Environment Our Business Our Approach At a Glance CEO Statement
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