Indonesia’s Small-Scale Palm Oil Farmers Finding Green Certification Costly
Indonesia’s small-scale palm oil farmers are not acquiring certifications as environmentally friendly producers because it is expensive and certified palm oil does not command a premium on world markets.
Sumail Abdullah, chairman of the Indonesian Palm Oil Growers Association (Apkasindo), said on Tuesday that the government had made little progress in getting small growers to obtain the Roundtable on Sustainable Palm Oil’s green certification. Before plantation owners can become green-certified they also need to get a land certificate from the National Land Agency (BPN).
“A land certificate issued by the BPN is one of requirements to obtain RSPO certification,” Sumail said. “Unfortunately, most farmers have yet to get it.”
The RSPO certification indicates that a palm oil plantation is managed without harming the environment. Farmers that qualify have to undergo inspection to prove they did not burn peatland or clear natural forest to plant oil palms, employ children in their plantations, or illegally clear old crops by open burning.
Small-scale farmers own about 3.3 million hectares of palm oil plantations - about 46 percent of the country’s 7.7 million hectares. Private-sector companies own 43 percent of the plantation area and the remainder is owned by state-owned firms. According to Sumail, about 80 percent of the plantations belonging to small-scale farmers had yet to be certified.
Achmad Mangga Barani, the Ministry of Agriculture’s director general of plantations, acknowledged that it was difficult for farmers to certify their land because of the high cost. He said the price to certify the land hovered around Rp 1.5 million ($159) a hectare.
He added that the cost could be reduced if regional administrations were able to dispense land certificates for plantations.
“If [the land certificate] could be issued by regional governments, the certification fee could be reduced to Rp 200,000 per hectare,” Achmad said.
The other factor discouraging farmers from certifying was the fact that there are no premiums offered by the market for certified palm oil, he said.
“RSPO promised us a premium buying price for certified palm oil. However, until now, there is no price difference between the certified and non-certified palm oil,” Achmad said.
The RSPO has said it would investigate how proceeds from the trade in sustainable palm oil can be used to facilitate certification of small holders.
Tan Sri Bernard Dompok, the Malaysian minister of plantation industries and commodities, said the Malaysian government had pledged 50 million ringgit ($15 million) to help smallholders move towards sustainable practices.
Sumail Abdullah, chairman of the Indonesian Palm Oil Growers Association (Apkasindo), said on Tuesday that the government had made little progress in getting small growers to obtain the Roundtable on Sustainable Palm Oil’s green certification. Before plantation owners can become green-certified they also need to get a land certificate from the National Land Agency (BPN).
“A land certificate issued by the BPN is one of requirements to obtain RSPO certification,” Sumail said. “Unfortunately, most farmers have yet to get it.”
The RSPO certification indicates that a palm oil plantation is managed without harming the environment. Farmers that qualify have to undergo inspection to prove they did not burn peatland or clear natural forest to plant oil palms, employ children in their plantations, or illegally clear old crops by open burning.
Small-scale farmers own about 3.3 million hectares of palm oil plantations - about 46 percent of the country’s 7.7 million hectares. Private-sector companies own 43 percent of the plantation area and the remainder is owned by state-owned firms. According to Sumail, about 80 percent of the plantations belonging to small-scale farmers had yet to be certified.
Achmad Mangga Barani, the Ministry of Agriculture’s director general of plantations, acknowledged that it was difficult for farmers to certify their land because of the high cost. He said the price to certify the land hovered around Rp 1.5 million ($159) a hectare.
He added that the cost could be reduced if regional administrations were able to dispense land certificates for plantations.
“If [the land certificate] could be issued by regional governments, the certification fee could be reduced to Rp 200,000 per hectare,” Achmad said.
The other factor discouraging farmers from certifying was the fact that there are no premiums offered by the market for certified palm oil, he said.
“RSPO promised us a premium buying price for certified palm oil. However, until now, there is no price difference between the certified and non-certified palm oil,” Achmad said.
The RSPO has said it would investigate how proceeds from the trade in sustainable palm oil can be used to facilitate certification of small holders.
Tan Sri Bernard Dompok, the Malaysian minister of plantation industries and commodities, said the Malaysian government had pledged 50 million ringgit ($15 million) to help smallholders move towards sustainable practices.