Despite playing an essential role in the global supply chain of palm oil, and supporting regional and national economy, discussions on oil palm smallholders are limited in mainstream conversations. They are the people depending their livelihood on the commodity, from providing food for their family to enabling their children and grandchildren to pursue higher education and ultimately, to change their lives for the better. Thus, behind every bottle of cooking oil or bar of soap lies the story that impacts millions of lives.
In Indonesia, the world’s largest palm oil producer, smallholders account for about 41% of total oil palm planted areas. In Malaysia, the second largest producer, smallholders account for about 27%. It has been long overdue that we acknowledge their contribution in supporting the heart of the industry and enhancing the development of their communities. For many of the smallholders, oil palm is more than a crop, it is a legacy, a livelihood, and a symbol of resilience passed from one generation to the next. The smallholders deserve support, genuine fairness and empowerment to shape their own futures.
For most smallholders, oil palm farming is not a path to wealth but often their only means of survival, to make ends meet. In Indonesia and Malaysia, smallholders are officially defined as those owning up to 25 hectares and 40.47 hectares of oil palm land, respectively. Although definition of smallholders varies between countries, in reality, most smallholders own only two to three hectares. The limited land ownership, coupled with lower average yields compared to larger plantation companies, leaves smallholders at a disadvantage with modest incomes, despite their critical role in the palm oil supply chain.
The oil palm sector plays a key role in providing job opportunities in particular, bridging the development gap between rural and urban areas. By employing their family members and neighbours, smallholders help to sustain local economy, at the same time, supporting their communities.
In addition, the oil palm industry plays a vital role in supporting the growth and empowerment of women in view of the wide range of opportunities available throughout the supply chain. While women contribute significantly to the sector, their involvement is often underrepresented and remains largely overlooked.
As smallholders, women not only serve as landowners or take on managerial responsibilities of their farms but also play an integral role in the day-to-day activities, including harvesting, applying fertilisers, weeding, and collecting loose fruits, among other tasks. Their active involvement empowers and inspires other women in the community to follow suit, enabling them to support their families and improve their living standards.
Although smallholders have sufficient practical knowledge for their day-to-day activities, they often lack the technical expertise such as the application of precision agriculture which is needed to enhance efficiency, increase yields and reduce cost of production. While mechanisation and automation are crucial for boosting productivity, these advancements are often beyond the reach of smallholders, resulting in them relying on conventional farming methods.
The outputs of most smallholders remain relatively low, not only due to limited land size but also because of their financial constraints, preventing them from fully realising the potential of their farms. As the procurement of quality seeds, fertilisers and better equipment add to their costs of production and given the choice between sustaining their livelihood and investing in new practices, the oil palm smallholders would continue implementing conventional methods which worked for them.
One challenge faced by smallholders is the low rate of replanting of aging oil palms. Oil palms typically start bearing fruit around 30 months after planting, with harvesting beginning about six months later. After their economic lifespan of about 25 to 30 years, oil palms need to be replanted. This is taking into consideration that as oil palms age, they grow too tall, making harvesting more difficult. At the same time, yields decrease, resulting in a loss of productivity. Oil palm smallholders are reluctant to replant their aging trees due to the loss of income during the first three years of replanting. However, this is not a challenge for plantation companies, as they have replanting plans in place that will be carried out in stages.
Despite the limited access to resources, oil palm smallholders have adopted sustainable practices, particularly in Indonesia and Malaysia, where mandatory national sustainability certification schemes namely, Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO), respectively, are in place. These certification programmes ensure that palm oil produced by smallholders meets the stringent environmental and social requirements.
It is unfortunate that as global demand for palm oil continues to grow, many oil palm smallholders are left behind, facing financial constraints and lacking access to the necessary resources and technologies to improve productivity and sustainability as well as keeping up with the evolving industry standards.
The next time you find palm oil on store shelves, remember that it comes from the hard work of countless individuals in producing countries, who rely on physical labour to make a living while contributing to food and energy security, one tree at a time. As consumers, we can play our part by advocating for sustainable palm oil production practices and supporting the inclusion of smallholders in the supply chain.
