The newly introduced RSPO Independent Smallholder Standard, adopted at the RSPO 16th General Assembly, responds to the needs and challenges of independent smallholders for inclusion in the RSPO system.
RSPO spoke with Dr Reza Azmi, Executive Director and Founder of Wild Asia, a not-for-profit enterprise that works closely with smallholders on the ground, to gain insight on how the new smallholder standard will make it more realistic for smallholders to achieve certification.
What are some of the challenges that smallholders face in their sustainable palm oil journey?
The main challenge that every farmer faces is the low price of palm oil, coupled with the typical challenges all smallholders face in terms of access to credit, land tenure security and higher costs of production from small-scale production.
Another challenge is the actual labour itself, as many of our farmers are elderly and could not manage the farms by themselves. Local workers are hard to find due to the intensity of the manual labour, and foreign labour carries the risk of legalisation issues and abscondment.
In terms of meeting certification, the main challenge is for auditors or industrial plantations to be able to translate the standards of certification to make them relevant to small-scale producers. There is also the issue of the high cost of certification, as the certification bodies are commercial entities and there are no direct subsidies by the market to reduce these costs.
How can we bridge the gap between smallholders and markets?
To promote the inclusivity of small producers in the global supply chain, is to leverage on the business relationships that exist between palm oil business consumers, its traders and the global suppliers of palm oil.
The drive for sustainable palm oil production will encourage non-certified mills towards greater sustainability. For many mills, the lack of premiums and the complexity of certifying independent producers hold back their sustainability progress. Out of the premiums available, there is an emphasis on Segregated (SG) CSPO, and thus the supply of SG palm oil is largely only serviced by corporate-owned mills that have large estates of their own. If we are to achieve a mixed portfolio that promotes smallholder inclusivity, then we need a way to encourage mills to adopt a sustainability programme.
The simplest mechanism is to provide premiums for a target volume of SG and Mass Balance (MB), which together with the regional refinery, can be directed into purchasing from targeted mills. With the availability of certified materials, there is thus a physical link to ensure that the material can flow to the regional refinery.
What we envisage is the procurement of sustainable palm oil from a mixed portfolio of raw material providers: from large corporate estates to small producers. For this to happen, the regional refineries must play a key role. This can be done in a way that allows all parties to be rewarded fairly, and by utilising technology further to ensure that certified raw materials are verifiable and reportable.
“Certification is not the goal,
How will the proposed Independent Smallholder Standard help to strengthen smallholders’ inclusion in the RSPO system?
improving livelihoods through sustainable production is.”
The Independent Smallholder Standard itself is a good step forward. What many people do not realise is that there is still a need for facilitators to be supported in order to create the local business case for supporting the growth of small producers, especially between the mill and their surrounding suppliers. The lack of incentives from the market for RSPO Mass Balance (MB) CSPO limits the options. Furthermore, many of the existing certified groups use most of the RSPO credit income for maintaining the certification itself (e.g., certification audits, certification management, etc.).
As for the Standard, we do agree that it will allow for greater inclusivity by utilising a stepwise approach – in simple terms, from raising awareness, to making solid commitments, and eventually, to implementation and compliance. This will ease the burden of certification for smallholders and make it more realistic for them to achieve it.
What are your key learnings from this year’s conference?
There is even a greater need for the concept of ‘shared responsibility’ to be realised and implemented on the ground. The phrase has been bandied about, but no clear action or direction has been implemented. The impression we have had is that the availability of RSPO Credits, the RSPO Smallholder Trainer Academy, and the new Independent Smallholder Standard are enough to support smallholder inclusivity, but certification is not the goal - improving livelihoods through sustainable production is. To get there, we need to keep supporting field projects that push the boundary of what this means, for example, to introduce polyculture and chemical-free production for smallholders, with the support of the palm oil value chain.