Indonesia – Efforts to help Indonesian oil palm smallholders comply with sustainability standards and “good agricultural practices” may not succeed if these do not better account for smallholder diversity, according to newly published research.
Independent oil palm smallholders are particularly struggling to comply with the increasingly strict rules in the sector, says the research article: Certification, good agricultural practice and smallholder heterogeneity: Differentiated pathways for resolving compliance gaps in the Indonesian oil palm sector. The article estimates that only 2.4 percent of independent smallholders in its research sites in Central and West Kalimantan are currently able to comply with the requirements of the Indonesian Sustainable Palm Oil (ISPO) certification system.
The large compliance gap is a serious challenge to reducing the impact of oil palm on the environment. Independent smallholders often don’t have the same opportunity to access technical and bureaucratic support and production inputs. Many consequently lack the capacity and resources to formalize their oil palm operations and adopt good agricultural practices. Independent oil palm smallholders are therefore comparatively unproductive, attaining less than 60 percent of their yield potential on average, says the study, led by the Center for International Forestry Research (CIFOR). Watch this short video that further examines the challenges facing independent smallholders:
“To develop the right policies to address the huge compliance gap, you do first need to better understand your smallholders”
To compensate, certain smallholders may expand into sensitive ecological areas containing natural forests and peat soils. Since independent smallholders are less visible to regulators and activists than corporations, their expansion practices have until recently received comparatively little attention. This is slowly changing as smallholders over the next decade look to rival private plantation companies as the sector’s largest producer group by acreage. Since many companies are becoming eager to demonstrate their commitment to eliminating deforestation and peatland conversion from their entire supply chains and not just their own plantations, the spotlight is increasingly becoming focused on this growing but comparatively under-regulated producer group.
Concerns are being raised over how corporate sustainability commitments are likely to affect independent smallholders. Because monitoring and tracing the origins of smallholder produce is complicated and expensive, many companies are reevaluating their smallholder sourcing strategies. This could pose a serious threat to smallholder market access in future. Enhancing smallholder compliance with sustainability standards such as Indonesian Sustainable Palm Oil could help prevent this.
Many companies looking to ‘green’ their supply chains will be more willing to invest in smallholders compliant of standards like ISPO, says research lead George Schoneveld, Senior Scientist with CIFOR. Since public support is also more accessible to compliant smallholders, helping smallholders meet the requirements of sustainability standards will not only protect their livelihoods, but also increase their access to the tools needed to become more productive and profitable on their existing plots.
“To develop the right policies to address the huge compliance gap, you do first need to better understand your smallholders,” warns Schoneveld. His research team, whose study has just been published in the journal Global Environmental Change, has proposed six types of independent smallholders, each likely to respond to very different approaches.
The different types of palm oil smallholders identified in the study:
• Subsistence farmers: with little education, no prior experience with oil palm, often reliant on the crop as their only source of income;
• Early adopters: little education but experienced with oil palm; often growing oil palm longer than others, also cultivating other plantation crops;
• Migrant laborers: with experience as workers on large plantations, understand good agriculture practices, technical fundamentals and legal requirements, oil palm specialists;
• Migrant farmers: little prior experience, late adopters, also cultivating other plantation crops;
• Entrepreneurs: little farm experience, livelihoods revolve around small-scale enterprise, comparatively large farms, see oil palm as an investment opportunity;
• Local elites: white-collar employees, little farm experience, large farms, reliant on hired labor, sometimes adopting more speculative strategies.
Appreciating this diversity will help NGOs, government agencies, or the private sector to better tailor intervention support to the compliance challenges unique to each group. The article for example, suggests that early adopters and migrant laborers are low hanging fruit for interventions looking to enhance smallholder compliance rates, since these farmers face fewer compliance barriers once access to bureaucratic support is improved. Subsistence and migrant farmers are conversely confronted by significant capacity and resource constraints, and would therefore benefit from targeted technical assistance and a staggered approach to ISPO compliance.
Since entrepreneurs and local elites are comparatively well-educated, resourced and embedded in the local bureaucracy, farmers in these groups are unlikely to demand extensive external support. Rather “local resistance [to measures] that threaten the status quo is inevitable, as influential local actors complicit in illicit land trading, regulatory evasion and illegal land encroachments look to protect their discretionary authorities, oil palm investments and sources of personal accumulation,” notes the study.