Smallholders improve community livelihoods through sustainable palm oil

1 April 2021

Frightening stories about palm oil production causing biodiversity loss, deforestation, violation of labour rights and social conflicts fill our daily news. These stories obscure those examples in which palm oil drives positive social and environmental change and improves the lives of farmers and their communities. These stories are as omnipresent as the negative ones but are seldom heard and told.

Since 2013, 32 groups of independent smallholders across Indonesia have started producing sustainable palm oil with the support of FORTASBI, Indonesia’s Sustainable Palm Farmers Forum. These farmers sold their palm oil via the Roundtable on Sustainable Palm Oil (RSPO) certification scheme. Earnings were used to improve own agricultural practices but also to serve the local community. This way, farmer communities now benefit from cleaner rivers, reduced fire incidences, or better access to health services. Here we highlight some results of this work.

Cleaner rivers, fewer fires and more ambulance cars

In the past, the river of the Tanjung Jabung Barat District in Sumatra, Indonesia, used to be dirty with few fish living in it. A few years ago, the local farmer cooperative used their earnings from selling sustainable palm oil, to protect the area along the river. Since then, river water quality has improved and the fish population recovered. This benefited the local community, which uses the river for bathing, laundry and fishing.

In South Sumatra, the palm oil farmer group KUD Karya Mulya used to experience frequent fires during the dry season jeopardising the community. In response, the group established a fire prevention team and built a fire warning system using earnings from their sustainable palm oil sales. Since the creation of the prevention team in 2018 no more fires have been recorded in the work areas of the cooperative, even during prolonged droughts.

Similar measures were taken in fire-prone Central Kalimantan, where the farmer group APKSM operates. APKSM members were trained last year to learn how fire hotspots can be monitored. The goal is that all members can anticipate fire hazards in their own fields and deal with it immediately through the Fire Care team.

Firepreventionteam APKSM Central Kalimantan

In a region in North Sumatra, hospital ambulances used to be expensive and poorly available. It was difficult for the community to access the hospital in time in case of emergency. A few years ago, three additional ambulance cars were bought using earnings from sustainable palm oil production. These cars can now be used by the community free of charge, which increased their access to the hospital.

What do these examples have in common?

All three examples play in communities in which cooperatives of independent oil palm smallholder farmers became RSPO certified to produce sustainable palm oil. All three used the earnings from selling sustainable palm oil to improve their community’s well-being.

Independent smallholders struggle to produce sustainably

Independent smallholders control about 40% of Indonesia’s total palm oil area, but they often have low yields and harvest fruits of poor quality. Because of lack of knowledge about good agricultural practices, lack of access to markets and to supportive institutions and financial and organisational barriers, they struggle to participate in the sustainable palm oil market.

An initiative to connect smallholders to the RSPO certification market

FORTASBI is an initiative that aims to connect independent palm oil smallholder farmers to the global sustainable palm oil market. The initiative supports farmers to improve their cultivation practices and to meet the requirements for RSPO certification. Through FORTASBI’s support, 7,500 farmers managing about 16,000 hectares of land have received RSPO certification since 2014. These farmers, which are part of 32 farmer groups, generate more than 55,000 metric tons of certified palm oil and 6818 metric tons of palm kernel oil annually.

Independent smallholder credits to make it work

Independent smallholders usually sell their fruit bunches to the closest mills, but these are often not RSPO certified. For them to still participate in the RSPO supply chain, the independent smallholder (I.S.) credit system has been introduced. Companies purchase I.S. certification credits from FORTASBI farmer groups through the RSPO Book & Claim system. By the beginning of 2020 approximately 1.3 Million USD were earned through I.S. credits. The 32 farmer groups of FORTASBI used their earnings to reinvest in their palm oil business, but also to support their local community and to protect their environment, as the examples above have shown.

Buying independent smallholder credits can make a difference

The example of FORTASBI’s farmer cooperatives shows: Buying independent smallholder credits through the RSPO can make a real difference on the ground. It provides smallholders and their communities with extra income that can be reinvested in their businesses and the community to improve livelihoods and enable scale success and benefits.

FORTASBI Story: The Resilient