01 Oct 20 | Weekly podcast
As the Indonesian government and big palm oil companies debate deforestation pledges, smallholder farmers can get caught in the middle
The government has asked the big palm oil companies that are IPOP signatories to step back from their no-deforestation pledges, in particular because of concerns that smallholder farmers will be unable to comply with IPOP sustainability standards and will be marginalised.
But the government’s anti-IPOP invective seems to be falling on deaf ears. On 17 February, IPOP announced it had recruited a sixth major palm oil company, Indonesia’s Astra Agro Lestari.
IPOP’s membership of multinationals now covers in excess of 60% of Indonesia’s palm oil output. Alongside Astra Agro Lestari, the other members are Asian Agri, Cargill, Golden Agri-Resources, Musim Mas and Wilmar.
IPOP signatories commit to palm oil that is deforestation-free, that is not derived from plantations on peatland and that promotes social inclusion. They are making strong progress – such as the palm oil supply chain map just completed by Golden-Agri Resources.
The decision of Astra Agro Lestari to join the group is seen as particularly significant because the company’s director Joko Supriyono is also chair of industry body the Indonesian Palm Oil Association, which could be a major player in the fight for greater sustainability in the sector.
According to IPOP, about 42% of the palm oil area in Indonesia is in the hands of smallholders, but they produce only about 35% of the country’s crude palm oil – suggesting significant scope for improving yields from the same land area.
In addition, palm oil smallholders are often not independent, but participate in government schemes in which private companies clear land for oil palms and must provide a portion of the land to local communities.
All in all, the Indonesian government’s professed concern for smallholders seems overblown. Anja Lillegraven of the Rainforest Foundation Norway, says that although “it is sometimes argued that IPOP is bad for smallholders”, the farmers really “stand to lose if the rainforest is destroyed”.