Blogs: Smallholders

One of the key challenges in the certification of sustainable palm oil is ensuring smallholders are not left out of the picture. Over 40 percent of Indonesia’s palm oil estates is owned by smallholders, yet less than 0.1 percent of them are certified.

Indonesian Sustainable Palm Oil (ISPO) is a legally binding, mandatory certification process for all oil palm growers (except smallholders) in the country. Indonesia is also aiming to make it the main national sustainability platform. Although it is currently voluntary for smallholders, the government is now focussing on how to bring smallholders into the fold so that they too can become more sustainable.

The Coordinating Minister for Economic Affairs, Darmin Nasution recently said that the government is developing clearer criteria and standards to ensure smallholders are able to attain ISPO certification.

“We have to create a standard for both small businesses and large businesses,” said Darmin.  “Companies or smallholders need to get the ISPO certificate if they meet the standard.”

For smallholders, a major hurdle in obtaining certification is sorting out the legal issues surrounding land tenure. Many for example, hold land titles issued by local districts rather than the national land authority. Further complications arise when their land is located in designated forest areas or is at odds with the government’s spatial plan – issues that smallholders may not even be aware of. Changing practices can have upfront costs that smallholders find hard to bear, even though improved efficiency and higher yields will deliver financial returns in the long run.  Smallholders also need more technical knowledge to help them productively manage their crops.

To address some of these challenges, PT SMART recently hosted the second SMART SEED gathering in Medan focussing on the role and importance of ISPO, as well as best practices in achieving certification. Around 150 participants, many of whom were smallholders attended the session which brought together our PT SMART team, representatives from the Food and Agriculture Ministry of Economic Affairs, the ISPO Commission, the Indonesian Association Certification Institute (ALSI) and The Forest Trust (TFT).

Jalal Sayuti, a farmer from Jambi explained why so few smallholders have gotten ISPO certification, “Previously, we would receive information about ISPO without understanding how to actually get certified. We understand that we need ISPO certification to sell to larger companies but need help getting there, so events like these are very valuable.  I hope for more support from the government and other companies to help us achieve ISPO certification.”

Many of the participants said they could see the benefits of ISPO certification as a result of the workshop. As a mandatory national certification scheme, ISPO certification has stricter regulatory controls and helps palm oil smallholder farmers increase their productivity sustainably, responsibly and legally.

“The added benefit of ISPO certification is equality. Once we achieve it, we all follow the same rules and are held to the same standards,” explains H. Narno, a farmer from SNV Indonesia.  “From today’s session, we can see that ISPO certification is possible with support from companies such as Sinar Mas and the government, and hope that more smallholders can benefit from this.”