Smallholder farmers account for roughly 40% of our palm oil supply. We provide support to help them achieve compliance with Roundtable on Sustainable Palm Oil (RSPO) principles and criteria and our policies, resulting in higher yields, better access to markets, increased profitability and more reliable income streams. In 2015, Cargill paid more than $1 million in premiums for RSPO and International Sustainability and Carbon Certification (ISCC) to smallholders who became certified. Our progress promoting smallholder certification includes the following:
- Harapan, West Kalimantan – Over 3,300 plasma smallholders RSPO and ISCC certified; working with over 400 independent smallholders towards RSPO certification
- Hindoli, South Sumatra – Over 9,600 plasma smallholders RSPO certified of which 8,800 are also ISCC certified; 90 independent smallholders RSPO certified
- Indo Sawit Kekal, West Kalimantan – Over 1,200 plasma smallholders RSPO and ISCC certified; working with over 110 independent smallholders towards RSPO certification
- Poliplant Group, West Kalimantan – Working with over 7,200 plasma smallholders towards RSPO certification
Outlook for 2017
We will promote the inclusion of smallholders in our supply chain and improvement of their livelihoods by providing the tools to mills to empower farmers. We will participate in programs focused on smallholder capacity building and responsible farm development.
As part of our 2020 Roadmap, we have established the following goals:
- 100 percent of high priority mill assessments by Cargill will include assessments of smallholder supply bases. A portion of them are implementing the Smallholder Empowerment Program.
- 100 percent of smallholders joining a Cargill certification project will achieve RSPO certification.
- Three projects will receive direct support from Cargill in meeting responsible production commitments and improving livelihoods.
In consultation with key stakeholders, Cargill will help define what it means to be a sustainable, profitable smallholder. We will leverage mills as hubs to influence broader numbers of smallholders with landscape level programs. At the same time, we will continue to engage direct suppliers and work with partners, including, Proforest, TFT, Solidaridad and Wild Asia, to build capacity at mill level to actively support smallholders in their supply base and increase access to markets.
Smallholder project in collaboration with WildAsia in peninsular Malaysia
In 2013, Cargill teamed up with Solidaridad and WildAsia with the goal of promoting the growth of RSPO certified fresh fruit bunch production among independent smallholders near Air Kuning, Perak, in peninsular Malaysia. The collaboration builds on existing relationships between refiners, mills, fresh fruit bunch dealers and smallholders. The fresh fruit bunch dealers play an important in facilitating relationships with smallholders. As a result of this project, 34 independent smallholders achieved RSPO certification in March 2015 and an independent mill received certification in April.
In early 2016, we expanded the project to include an additional 143 new independent smallholders which are expected to be audited by June 2016. Once certified, there will be a total of 177 independent smallholders with 708 hectares of planted area and 24,619 metric tons of fresh fruit bunches in the WildAsia group scheme.
Project with Winrock International
In 2016, Cargill will partner with Winrock International, IDH Sustainable Trade Initiative and Costco in a project to reduce greenhouse gas emissions and increase market access for smallholders. The group is developing a comprehensive draft “Smallholder Protocol for Sustainably Managing Peat Areas and Responsible Re-Planting of Oil Palm.” This protocol will provide step-by-step guidance for smallholders and intermediaries to identify and manage peatland areas in existing plantations and new plantings in a sustainable manner, and implement methods to restore areas not suitable for replanting. The initial project will be piloted over 14 months with about 60 smallholder farmers in Riau Province, Sumatra.