PALMOILMAGAZINE – The JaSPON x RSPO Conference and Engagement Forum 2023, a joint event held by the Japan Sustainable Palm Oil Network (JaSPON) and the Roundtable on Sustainable Palm Oil (RSPO), highlighted a collaborative sustainability initiative that is helping smallholders in Indonesia market their palm oil products to the global market.
The conference, which took place on October 11-12, 2023, promoted the SMILE program (SMallholder Inclusion for better Livelihood & Empowerment) to various palm oil industry stakeholders in Japan.
This program is a collaborative initiative between Asian Agri, an upstream palm producer, Apical Group, a mid-stream palm oil processor, exporter and trader, and KAO Corporation, a downstream producer.
SMILE is specifically designed to support independent oil palm smallholders in Indonesia to adopt sustainable planting methods and sell higher-quality palm oil products to the global markets. Ultimately, smallholders are expected to generate higher incomes as they can increase exports of sustainable palm oil products.
Palm oil planters play a significant role in the palm oil value chain in Indonesia, as more than 40 percent of the country’s 16.8 million hectares of oil palm plantations are owned by smallholders. However, smallholders face various challenges in their businesses, including market fluctuations, weak bargaining power, and difficulty accessing financial and technical resources.
In a statement published on the Apical Group website on October 11, 2023, Ivan Novrizaldie, Head of Sustainability for Asian Agri, said that independent smallholders are more vulnerable than scheme farmers because they are not tied to any company or mill. He added that less than 20 percent of the total number of smallholders certified in Indonesia are independent smallholders.
“We are therefore very excited to share how the palm oil industry can be more inclusive through our SMILE program,” Novrizaldie said. “With smallholders making up approximately 50 percent of our supply base, Asian Agri is well-positioned to contribute to the resilience and sustainability of the smallholders in the industry.”
“It is our collective responsibility to support and uplift the smallholders in Indonesia,” he added.
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According to its official website, Asian Agri, which was established in 1979, has grown to become one of the largest oil palm companies in Asia and currently manages about 100,000 hectares of oil palm plantations in North Sumatra, Riau and Jambi.
Meanwhile, Apical Group is a vegetable oil processor with a global footprint. It runs a vertically integrated mid-stream refining and value-added downstream processing. The company is a supplier of various palm oil-based products used in the food, feed, oleochemicals and renewable fuel needs across industries.
Bremen Yong, Director of Sustainability for Apical Group, stressed the collective responsibility within the palm oil value chain to support and uplift smallholders in Indonesia. Yong disclosed Apical’s long-term commitment to assisting 5,000 independent smallholders in achieving RSPO certification by 2030. The success of the SMILE program underscores the transformative potential of collaborative efforts.
Khairul Anam, Head of Smallholder Cooperatives for Koperasi Konsumen Tebing Tinggi Pangkatan Sejahtera, traveled from North Sumatra, Indonesia to attend the event. He expressed his pride in their cooperative’s journey towards sustainability in Japan, with yields increasing by a remarkable 60% since engaging with the SMILE program. The results have drawn interest from more independent smallholders, leading to a 536-member increase in their cooperative. Most importantly, Anam noted the newfound happiness and hope within his community and family.
One of the benefits of securing RSPO certification is that farmers can increase their exports, as global markets often require them to have internationally-acknowledged certification for sustainable palm oil. In this case, it is RSPO certification standards that are promoted to the farmers.
Apical, Asian Agri, and Japanese company KAO Corporation have united to champion the SMILE program, which aims to empower oil palm smallholders by enhancing yields, securing international certifications, and ultimately improving livelihoods through the sale of certified palm oil.
The JaSPON x RSPO Conference and Members Engagement Forum endeavors to tackle critical issues in sustainable palm oil production. By uniting industry leaders, stakeholders, and experts, the event promotes knowledge sharing and collaboration to drive progress in the palm oil sector. (T8)