Tackling smallholder issues is central to the sustainable transformation of the palm oil industry. Palm oil production is a key livelihood for 2.5 million farmers and their communities. The industry as a whole provides direct and indirect employment to 16 million people in Indonesia and generates US$19 billion (Source: MPOC and InfoSAWIT Data Center 2015) annually in export revenue for the country.
Certification through the globally recognised Roundtable for Sustainable Palm Oil (RSPO) is still considered by many as a means to help small farmers gain access to market through better practices. Currently, the RSPO is undergoing a review of its Principles and Criteria (P&C) – effectively the rules of the standard. This provides many stakeholders with the chance to discuss how to help independent farmers achieve best management practices, higher yield, and compliance with sustainability standards, with the ultimate goal of certification.
I believe there are deeper considerations here. It is possible we are asking the wrong questions. Rather than asking how to help small farmers become certified, perhaps we should be asking whether RSPO certification is the right end goal for these farmers? Based on our experience, the three key areas where smallholders face certification challenges are smallholder legality (P&C 2), labour practices (P&C 4), and conservation of High Conservation Value (HCV) areas (P&C 5 and 7).
Can we engage with independent farmers, help them meet sustainability requirements in the context of a transparent and traceable supply chain but then allow them to choose whether certification is a right “ultimate” step for them?
Golden Agri-Resources (GAR) has been engaging with smallholders through its plasma schemes and Innovative Finance Replanting programme. From that experience, we’ve drawn out two insights about smallholders and certification we think the current P&C review process should consider.
1. Some smallholders see only costs not value in certification
GAR has experience with plasma smallholders who have completed their time in the plasma programme and become fully independent choosing to opt-out of certification. When they are in the plasma scheme programme these smallholders are required to be certified. Once they have completed that programme and have a choice, some are opting out. In one case in Jambi, previously certified plasma smallholders opted out once they were free to do so because of concerns about ongoing costs and compliance requirements associated with RSPO certification.
In short, these smallholders do not see the value in certification.
2. Certification requirements don’t fit smallholder realities
Linked to the concerns about the costs of certification, are the challenges associated with complying to strict requirements when you are a smallholder. In many cases, the RSPO standards don’t work well in the context of small farms.
In a recent replanting project involving a group of 210 independent farmers with 400 hectares of replantable area, we identified challenges for smallholders to meet certain requirements. For example, RSPO P&C 7 requires a comprehensive and participatory independent social and environmental assessment. Not only can these assessments be costly, in some cases, they result in independent farmers having to significantly reduce their planting area. An example is the classification of “parits” (small drains) as riparian within smallholder farms, which cannot be planted around. For poor farmers whose main source of income relies on this planted area, giving up land may not be an affordable option.
GAR’s current Innovative Financing programme for replanting requires RSPO certification, so farmers who cannot meet the current RSPO P&C requirements are excluded from participating. This has two knock-on impacts. First and most directly, smallholders who are excluded can’t afford to replant and continue to operate at low yields with the potential for further land development as they try and boost incomes.
A second impact is that excluded farmers entice other participants, often family members, to also withdraw from the programme. This risks the successful delivery of the whole replanting programme which requires a certain area of land and a number of farmers within a cooperative structure to secure the replanting finance. Exclusion of one farmer based on inability to achieve certification can have a domino effect on the programme.
The lack of flexibility for smallholders in the current RSPO system effectively excludes them from help and support and discourages other independent farmers from taking part in this sustainable journey.
An opportunity to change the approach to smallholders
One of the key challenges for sustainability standard systems is to ensure the focus is on impacts and delivering sustainable outcomes. When we focus on farmers “getting certified” we potentially fail to help them “be more sustainable”.
The RSPO Smallholder Strategy approved by the RSPO Board of Governors in March 2017 has as a key objective increasing the number of smallholders in the RSPO system. This laudable objective can only be achieved if certification is simplified, made cost-efficient, and delivers meaningful value to smallholder farmers. The P&C Review provides a rare opportunity to streamline requirements to address barriers to smallholders taking up certification. It also provides an opportunity for the RSPO community to consider whether certification is the best way to help increase small farmers’ productivity and income through responsible practices. Essentially whether the RSPO plays a role in raising the floor of the industry performance, even if that does not result in a certificate being issued.
Editor’s note: GAR remains committed to achieving 100 percent RSPO certification for its own estates by 2020. We are also exploring ways to help smallholder farmers achieve better yields, higher incomes, and better agricultural practice, using certification as one of a number of tools to help us raise the performance of the palm oil sector.