Who are oil palm smallholders (RSPO, 2009, 2010):
Farmers growing oil palm, sometimes along with subsistence production of other crops, where the family provides the majority of labour and the farm provides the principal source of income and where the planted area of oil palm is usually below 50 hectares in size.

1. Scheme smallholders.
2. Independent smallholders.

 

Characteristics of Scheme Smallholders (RSPO, 2009):

  • Structurally bound by contract, credit agreement or planning to a particular mill.
  • Not free to choose the type of crop.
  • Supervised in planting and crop management techniques.
  • Organised, supervised or directly managed by managers of the mill, estate or scheme to which they are structurally linked.
  • Scheme smallholders should be certified with the mill with which they are associated.

 

Characteristics of Independent Smallholders (RSPO, 2010):

  • Freedom to choose how to use their land.
  • Freedom to choose type of crops to plant.
  • Self-organized, self-managed, and self-financed.
  • Not being contractually bound to any particular mill or association.
  • May sell their fresh fruit bunches either directly or through intermediaries to a number of mills.
  • May receive support or extension services from government agencies.
  • Independent smallholders are to be certified independently of mills and under a group certifications (not individually).

For both types (Scheme & independent smallholders)
Certification requirements are focus on the Fresh Fruit Bunch and not Crude Palm Oil.

Independent Smallholders are varied in:
– plant material
– land size
– age of palm trees
– distance to mill
– infrastructure
– maintenance
– access to inputs
– access to technology
– access to information
– access to finance
 

– Globally: 3 million heads of family
– Malaysia: scheme 30%, independent 11% (2008)
– Indonesia: 43.8% (2009)
– Thailand: 76% (2009)
– Papua New Guinea: 42% (2008)
– Nigeria: 80% (2006)

 

Why Smallholders?

  1. Smallholders contributes to a large activities that promote the welfare of rural society.
  2. Smallholders needs to be prepared to keep face with rapid changes in the modern market.

 

The advantages of the inclusion of small-scale producers:
1. Consumers awareness of food that is produced and traded fairly.
2. Corporation are expected to operate in socially responsible way.
3. Government looking for sustainable rural development for widest benefits to society.

Smallholders traditionally face many challenges (RSPO, 2016):
1. They lack knowledge about good agricultural practices and logistics
2. They have difficulty in gaining access to markets.
3. Independent smallholders are less efficient than other producers due to their smaller plot size.
4. Their yields are generally much lower than those of commercial plantations.

A number of projects aimed at assisting smallholders have identified further critical issues, such as (RSPO, 2016)
1. The use of poor quality seedlings
2. Maintaining old palms
3. Applying insufficient fertiliser
4. Harvesting unripe FFBs
5. Poor data management.

It is imperative that smallholders are able to participate in the supply chain if sustainable palm oil is to really become the norm in the market.

RSPO certification is designed to support smallholders to improve their livelihoods by targeting the key factors that make a big difference:
1. Improved management practices
2. Better quality fresh fruit bunches (FFB)
3. Increased yields
4. Increased access to markets.

 

What should be done?

  1. Create smallholder organisations.
  2. Improve their access to information, technical assistance, financial resources, market, etc.
  3. Develop a strategic to improve governance (policies & institutions) in the modern market with the inclusion of small-scale producers across the value chain.
  4. Develop sustainable and equitable path ways in the entire value chain.

 

 

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