Sustainable Projects Aim To Support Palm Oil Smallholders In Indonesia

Friday, August 19th, 2016 | 1824 Views

When 40 percent of the world’s palm and palm kernel oil are produced by smallholders, the question of sustainability arises. Projects to support smallholders can improve their productivity and secure a sustainable supply chain.

Palm oil is used in the food industry in a wide variety of applications, such as margarine and pastry dough, and global demand for the palm oil market is expected to exceed 72 million metric tons by 2020. With a sizeable portion of palm oil supplied by smallholders, initiatives have been launched to help create a positive economic, environmental and social impact on the people that depend on palm oil for their livelihood.

Independent smallholders tend to be self-managed, financed and equipped. From adequate seed stock to proper equipment, the average smallholder may experience all kinds of challenges. In addition, sustainable farming methods, efficient production and high occupational health and safety standards are some of the most important conditions for certified palm oil production.

Up to 5,500 smallholder farmers in Indonesia spanning an area of roughly 16,000 hectares can learn how to fulfil these requirements locally with smallholder training programs. The five-year smallholder program has been in operation since 2015 and was implemented by not-for-profit Solidaridad in cooperation with partners Good Return and Credit Union Keling Kumang (CUKK), with support from Henkel. The Australian non-governmental organisation Good Return coaches and supports the teachers who carry out the trainings on the ground, and will continue the farmer support program after the project ends. The teachers are employees of CUKK, the second largest local credit organisation in Indonesia. Earlier this year, BASF joined the effort as an additional industrial partner.

The project aims to establish sustainable supply chains for palm and palm kernel oil that both effectively improve smallholders’ living conditions and are eligible for certification according to the criteria of the Roundtable on Sustainable Palm Oil (RSPO).

Around 1,600 farmers will learn about the different aspects of good agricultural practice (GAP) in direct trainings that include measures for sustainable farming as well as for increasing crop yields. An additional 3,900 smallholders will be reached not only through a multiplier effect, but also via farmer field days and regular text messages on their mobile phones.

Productivity of small farms in the palm oil industry is estimated to be 40 percent lower than the average when compared with larger companies. Measures ranging from farmer trainings to sustainable farming methods could increase palm fruit yields and smallholders’ revenue, while at the same time making a significant contribution to improve the livelihoods of independent oil palm farmers in the province of West Kalimantan, one of the poorest regions in Indonesia.