Indonesia: Palm oil smallholders seek help with complicated certification process

Dewanti A. Wardhani The Jakarta Post 9 May 16;

Palm oil farming, though a promising sector, remains a challenge for independent smallholders due to difficulties in obtaining complicated and costly certification from the Roundtable on Sustainable Palm Oil ( RSPO ).

Independent smallholder Joko Suyono, who operates in the Batanghari regency of Jambi, says getting hold of various permits and certifications requires a complicated process that the local administration does not help with.

Joko recounted the difficulties he faced in obtaining his RSPO certification, which is required for palm oil to be sold in many overseas markets to help to ensure that farming processes are conducted in a manner that guarantees environmental sustainability.

Joko said he sought help from the Jambi administration multiple times but to no avail. He received no assistance or guidance from the local administration, and as a result had to take matters to his own hands, which took months to complete.

“The certification is important for farmers but the requirements are quite difficult to fulfill for independent smallholders like myself. That’s where the government should come in,” Joko said recently during a discussion held by the Indonesian Palm Oil Pledge ( IPOP ) in Central Jakarta.

Smallholders are responsible for 40 percent of the total 10.46 million hectares of palm oil plantations across the country, and produce a little over 10 million metric tons of crude palm oil ( CPO ) per year according to 2015 data from IPOP. Indonesia, the world’s largest palm oil producer, produced 32.5 million metric tons of CPO in 2015.

In order to obtain the costly RSPO certification for their fresh fruit bunches ( FFB ), smallholders must fulfill a number of requirements.

The principles of sustainable management as promoted and assessed by the RSPO for its certification process include transparency, legal and regulatory compliance, best production practices, environmental responsibility and a commitment to local community development, human rights and land rights, to name a few.

Land rights is one of the largest obstacles for obtaining certification. Many smallholders like Joko do not own updated land ownership certificates.

He eventually received RSPO certification, after which prices for his fresh fruit bunches soared and became stable, and his income increased. “Local administrations should facilitate and assist smallholders in obtaining the RSPO certification,” Joko said.

Bambang Gianto, a plasma ( dependent ) smallholder in South Sumatera’s Banyuasin, said that the RSPO certification had done wonders for his production.

Unlike independent smallholders, however, plasma smallholders receive training through their partnerships with palm oil firms that facilitate their certification processes. Bambang is one of the many partners of Cargill.

“For certificate, we can gain the trust of firms and eventually establish partnerships with many firms, resulting in higher productivity and income. However, it would have been difficult to obtain certification without help that Cargill provided,” Bambang said.

A number of crude palm oil producers, such as Sinarmas Agri and Resources Technology ( SMART ), Asian Agri, agribusiness giant Wilmar and global food company Cargill, have increased partnerships with local CPO farmers employing sustainable methods after receiving pressure from environmental groups. The firms facilitate bank loans and training for partner farmers to help them get RSPO-certified.

SMART innovative financing vice president Reza Ardiansyah said that it was seeking to add 1,000 smallholders to its empowerment program, which facilitates bank loans for the farmers. The partnership is part of IPOP’s smallholders’ empowerment program.