Coconut is the largest estate crop planted in Indonesia and the second largest area after rice. About 97 percent of the 3.7 million hectares coconut belong to smallholder with average to 0.5 hectare per farmer. It is estimated that there are about 7.0 million coconut farmer households who depend their income on or affected by the economy of coconut. From farming system point of view, the coconut farmers have already had experience in coconut based farming system hut most of them have not managed their coconut farm properly. The objective of CBFS is to generate additional income and employment from a unit holding under coconut palm. Low income of the coconut farm is the main problem of coconut industry in (his country. The main characteristics of the CBFS are (I) The crops planted are very crowded, so they exceed the area capability, (2) Proper cropping system have not been employed a ffected to low productivity and income of the farmers, (3) Farm maintenance, fertilizer application pe.st and decea.se control have hardly been provided and (4) Use of improved varieties are limited. In general there are three traditional CBFS in smallholder coconut plantation namely (I) CBFS with perennial crops, (2) CBFS with annual crops and, (3) CBFS intercropped with both perennial and annual crops. In term of research activity, research on CBFS has been carried out since 1970, where the most of the result of research activities was found to have no adverse effects on the productivity of the coconut palm. Generally, the results of the research activities have clearly brought out the economic advantages of CBFS compared to coconut monocropping system. Fluctuating and low prices of the product of intercrops in the CBFS usually become the main reason for the farmers in poor adoption of recommended technology on CBFS development. Enhancing the productive capability of these systems can only succeed if they are grounded in through understanding of farming system and reflect farmers ' expressed problems and needs. This can only be obtained by the active participation of research and extension agencies with the farmers at every stage of intervention development.