Smallholders are responsible for a large proportion of all palm oil production. These are mostly family businesses that have one to a few hectares of land. In Indonesia, 30-40% of the palm oil is produced by one million smallholders. The certification of smallholders for sustainable palm oil production has specific sustainability issues associated with it.
There are inequalities between smallholders and palm oil factories in the areas of land rights and contractual dependence relationships.
Image of palm oil under fire
Palm oil is the most consumed plant oil in the world. Production is expected to increase at least five percent every year. This rapid growth in combination with many sustainability issues has put the image of palm oil under heavy pressure. The Roundtable on Sustainable Palm Oil (RSPO) has developed standards for sustainable palm oil. In this global organization, parties such as palm oil producers, trading companies, food producers and NGOs work together. RSPO develops methods that can be used by smallholders, palm oil plantations and factories.
Appropriate Division of Roles
CREM, Global Sustainability Associates and Brinkmann Consultancy carried out two projects in Sumatra, Indonesia. They helped smallholders to obtain RSPO certification. The most important lesson learned from these pilots was the appropriate division of roles for all parties. In an industry where smallholders are playing an increasingly important role, the involvement of these farmers is a must. The users of palm oil and palm oil factories need to find financial constructions and implementation processes to make the certification of smallholders possible.
Step-by-step to RSPO certification
The implementation of a similar business model needs to create a win-win situation for both farmers and customers. The smallholders would benefit from a phased implementation of certification. This would mean that they couldmake their agricultural activities more sustainable in a step-by-step manner and retain access to the markets that they need to finance the certification. This would clear the way for smallholders to work together and learn from each other in a successful journey to certification.
More info: Victor de Lange