Challenges faced by smallholders in achieving sustainable palm oil certification in Indonesia

Abstract

Reducing tropical deforestation caused by the expansion of agricultural and other commodities requires effective and equitable interventions for engaging small-scale producers. Interventions should reduce deforestation and environmental degradation while improving the welfare of rural households. Voluntary, sustainability certification schemes provide clear pathways and incentives for both large scale and small-scale producers to move towards more sustainable and inclusive commodity production. Although the benefits of certification to many small-scale commodity producers are debated, the certification of oil palm smallholders can provide ecological and social benefits under the right conditions. There are significant challenges for smallholders, in particular independent smallholders, to achieve certification. In this article, we evaluate the certification process of 1280 oil palm, independent smallholders and identify the main challenges they faced in achieving certification. We then analyze a dataset over 6261 farmers in Central Kalimantan, Indonesia to estimate which farmers are likely to face obstacles in achieving sustainability certification. The results of the study indicate that farmers that have been excluded by historical planning and agricultural extension programs as well as smallholder plantation schemes are disproportionately disadvantaged in comparison with farmers that were supported by these schemes. The results demonstrate that without the involvement of government and support from non-government or private sector actors, independent smallholders are unlikely to achieve voluntary, sustainability certification. To avoid the exclusion of smallholders from supply chains, a systematic effort would be required to overcome many of these structural disadvantages. Novel, multi-stakeholder approaches, in which the private sector and civil society organizations collaborate with subnational governments, may assist in overcoming these challenges. Show more