Smallholder palm oil plantations account for 40.6% of Indonesia's total palm oil plantations.

By 2019, the area of palm oil plantations in Indonesia had reached 16.4 million hectares, up from only 295,000 hectares in 1980. The rapid expansion of palm oil plantations is inseparable from the role of smallholder palm oil plantations, making Indonesia the world's largest palm oil producer.

Since 1980, palm oil plantations were dominated by large state-owned plantations. However, since the commencement of partnerships between farmers and companies in the form of People's Core Plantations (PIR), smallholder palm oil plantations have continued to grow. The proportion of PIR land has steadily increased, from only 2.1% of the total national palm oil plantation area or 6,175 hectares in 1980, to 40.6% of the total, or 5.8 million hectares in 2018. This makes it the second largest after large private plantations.

The growth of these smallholder palm oil plantations has helped boost the local economy and reduce unemployment in surrounding areas. Through the People's Palm Oil Rejuvenation Program (PSR), the government is striving to maximize the yield and productivity of these smallholder plantations.