Independent palm oil farmers excluded from sustainable market, finds study

A new study revealed that independent producers of palm oil in Indonesia are involuntarily excluded from supply chains which lead to permanently certified factories.

Led by a Hawaiʻi University in Mānoa researcher, the results are published in Earth & Environment Communications And highlights an important barrier to create a fair and lasting market for palm oil.

“Passive exclusion is silent but powerful,” said Andini Ekaputri, principal author who conducted research as part of his doctorate. At the College of Tropical Agriculture and Human Resilience Department of Natural Resources and Environmental Management. “Many farmers never have the opportunity to participate in certified factory markets, and they lack potential advantages such as prices transparency.”

Global market of $ 72 billion

Palm oil, made from the oil palm fruit, is the most used edible oil in the world. It is a key ingredient in hundreds of household products such as pizza, shampoo and donuts, and is also used in animal feed and as a biofuel. The world palm oil market is estimated at $ 72 billion per year.

While large plantations belonging to companies produce most of the palm oil, around 30% come from small farmers. These farmers are divided into two categories: contract small operators, who have official agreements with palm oil mills and small independent operators, who operate without these contracts.

Indonesia, the world’s largest producer of palm oil, has a large number of small independent operators. The study revealed that Indonesian factories certified by the round table on durable palm oil (RSPO) were less likely to obtain these independent farmers.

Independent farmers have left aside

The research team analyzed the data from Mills of Kalimantan and Sumatra and found that the certified factories brought only 7% of their fruits of small independent operators, even if these farmers produce approximately 34% of total palm oil fruits. Conversely, Certified Mills bought more than expected from small contractual operators.

The results will inform the regulation of products without deforestation of the EU, which may risk cutting certain producers of palm oil on a small scale.

The authors recommend that organizations like the RSPO and the main palm oil traders adopt a more proactive approach. They urge an increased commitment to small operators and collaboration efforts involving governments and the private sector to solve problems such as land legality.