Musim Mas’ independent smallholders training programme towards RSPO certification unlocks farmers’ access to global markets
A total of 2,295 independent smallholders from four farmers’ associations in North Sumatra and Riau have successfully sold their RSPO certified sustainable palm oil to international buyers through RSPO’s PalmTrace trading platform. The farmers, who participated in Musim Mas’ smallholders extension programme, received about Rp. 11 billion (732,453USD) from the successful transaction. Combined with the sales garnered in 2020 and 2021, these farmers’ associations have earned a total of Rp.18,7 billion (1,245,169USD) over the past three years.
Bearing fruit
The four associations are part of Musim Mas’ independent smallholders training and RSPO certification programme, which started over five years ago as the Indonesian Palm Oil Development Scheme for Smallholders (IPODS). Musim Mas developed the original IPODS programme with the International Finance Corporation (IFC) as a way to encourage and enable independent oil palm farmers to obtain RSPO certification.
“It is truly a significant achievement for smallholders to be certified because it opens more doors for them to sell their palm oil volume to global buyers seeking sustainable palm oil,” said Rudman Simanjuntak, Musim Mas’ Independent Smallholders Manager.
“The RSPO Credits supply chain model is an important entry point for smallholder members to become certified sustainable,” says Guntur Cahyo Prabowo, RSPO Acting Head of Smallholder Programme.
Photo Credit: Musim Mas
Integrating smallholders in sustainable palm oil supply chain
In Indonesia, smallholders manage a significant 40% of the total oil plantation. They play a key role in producing oil palm for domestic and international markets and are key to increasing the amount of palm oil that meets sustainability standards (RSPO and ISPO).
However, independent smallholders struggle due to lack of technical knowledge, limited access to quality planting materials and financing. They rely on friends and neighbours, who often also have little formal training.
Addressing these challenges, Musim Mas works with government agricultural extension offices at the famer level to engage with independent smallholders who are usually assembled as associations or cooperatives. This training uses a comprehensive curriculum aligned with the RSPO Principles & Criteria (P&C) to help smallholders close the gap between their old farming practices and those required for RSPO certification. As a result, RSPO certification opens up global sustainable palm oil supply chains and those markets.
Encouraging entrepreneurship
The smallholders training programme is part of Musim Mas’ commitment to improving the livelihoods of palm oil farmers in remote areas of Indonesia by helping these farmers increase their incomes. The programme assists smallholders with access to financing, allowing them to replace ageing palms, plant higher yielding seedlings, and manage their oil palms, all while meeting certification standards.
“One important lesson we learned in the programme was to focus on increasing yields, not deforesting new areas,” said Kateni, Chairman of the Rokan Hilir Association of Independent Oil Palm Smallholders in Riau. “This training taught our members about better and more sustainable methods of growing oil palm.”
“Joining the programme and then becoming RSPO certified brought significant improvement to our quality of lives, and we are thankful for that,” said Joko Prasetyo, Chairman of Pelalawan Siak Association of Independent Oil Palm Smallholders in Riau. “Our members are very proud of being recognised as sustainable and responsible farmers.”
Unlocking new markets
By obtaining RSPO certification, the independent smallholders qualify to join RSPO’s PalmTrace trading platform, which allows smallholders to earn a premium on their certified oil palm products.
“The purchase of the RSPO credits is essential to encourage the production of certified sustainable palm oil and a sustainable supply chain,” said Rudman Simanjuntak, Musim Mas’ Manager of Independent Smallholders. “As our smallholders' programme scales up, we hope to see more smallholders get benefits from certification.”
Ikhsan Gunawan, Chairman of the Rokan Hulu Group of Independent Oil Palm Farms in Riau, said, “We used to grow oil palm the old-fashioned way. We never would have imagined we could do business with international companies. RSPO certification made it possible.”
As smallholders depend on environmental services for their livelihood, it is essential to promote the sustainable production of oil palm to ensure resilience and long-term economic growth.
Prabowo added, “Transforming an industry is a process — in the long term, the smallholders’ efforts will help to transform the market into a more socially just and environmentally sustainable industry. The premium received is not only a viable business opportunity, but also a reward for contributing to market transformation.”
