PALMOILMAGAZINE, BALIKPAPAN – The Roundtable on Sustainable Palm Oil (RSPO) and the Indonesian Palm Oil Farmers Association (APKASINDO) have signed a landmark Memorandum of Understanding (MoU) aimed at accelerating inclusive growth, certification, and market access for Indonesia’s oil palm smallholders. With smallholders accounting for about 40% of the country’s palm oil output, the partnership represents a significant step in reinforcing Indonesia’s global leadership in sustainable palm oil.
As the world’s largest palm oil producer, Indonesia supplies 55% of global demand. However, smallholder productivity lags behind, averaging just two to three tonnes per hectare, compared with six to eight tonnes per hectare on larger estates. This productivity gap—compounded by limited access to finance and certification—poses serious risks to smallholder livelihoods and the nation’s competitiveness.
In response, RSPO and APKASINDO have committed to a model of inclusive growth that goes beyond yield improvements. The partnership emphasizes fair participation, farmer empowerment, and stronger rural economic resilience, ensuring millions of smallholders are not left behind as global markets increasingly demand sustainability and traceability.
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Across five key areas of collaboration, the MoU establishes smallholders as full economic partners, rather than marginal suppliers, with fair market access, social empowerment, and sustainable practices. Guntur Cahyo Prabowo, RSPO Head of Smallholders, underlined, “This MoU is not just about certification, it is about fairness, resilience, and inclusive growth. Every tonne lost to low productivity erodes Indonesia’s global advantage, but closing the yield gap without expanding land secures Indonesia’s competitive edge. In a world where sustainability, traceability, and equity are the new rules of trade, investing in smallholders is a key lever to unlock the growth needed to reach the 8% national target.” He said.
Without inclusive action, Indonesia risks losing billions of dollars annually due to productivity gaps, missed market premiums, and exclusion from increasingly regulated global markets, such as under the European Union Deforestation Regulation (EUDR). By prioritising smallholder inclusion, this MoU ensures that Indonesia’s palm oil leadership remains resilient and sustainable.
Dr. Gulat ME Manurung, Chairman of DPP APKASINDO, emphasized that this Memorandum of Understanding marks a historic milestone for Indonesian smallholders. Until now, farmers have often been regarded as marginal suppliers, even though smallholders contribute nearly 40% of national palm oil production.
“With this strategic collaboration with RSPO, we are recognized as equal partners in the global supply chain. For APKASINDO, this is not only about certification, but also about the future of millions of farming families, access to financing, fair markets, and enhancing productivity without the need to open new land. We believe this partnership will strengthen rural economic resilience, close the yield gap, and safeguard Indonesia’s leadership in sustainable palm oil.”
This cooperation also serves as an open call to government, financial institutions, and industry stakeholders to build an enabling ecosystem for smallholders. By recognising smallholder farmers as equal partners, Indonesia is not only safeguarding sustainability but also strengthening its position as a global leader in a fair, inclusive, and resilient palm oil industry. (P3)
