The coconut area in Indonesia increased rapidly from 1.6 million ha in 1969 to 3.4 million ha in 1992. It is estimated that the coconut area in 1998 will reach 3.76 million ha. However, the role of coconut as the source of cooking oil will be replaced gradually by oil palm. In 1991, 62 percent of cooking oil was derived from oil palm, only 29 percent came from coconut. In the mean time, copra has no longer performed as the important export commodity, and the export of coconut oil and copra cake have not increased either in the last few years, while the export of other coconut products have tended to increase. Considering the condition of the coconut plantation in Indonesia, its competition with other vegetable oil sources, and the existing potency, the policy for coconut industry in Indonesia is based on: (1) integrated agribusiness development pattern, (2) product diversification, (3) intercropping, (4) partnership with big company, and (5) reducing government role. Therefore, the integrated coconut farming system has been developed. It involves the integration of the coconut farmers and the coconut businessmen, the coconut palms and the intercrops, the economic scale development region and the coconut production, processing and marketing. Through this system, the coconut industry will survive the global competition and increase the coconut farm's income. The example of the successful program is discussed in this paper.