Could smallholders trigger a tipping point for sustainable palm oil?

18 Nov 2019

The number of smallholders signing up to the Roundtable for Sustainable Palm Oil (RSPO) increased 165% in the past year, in what could be a significant step toward making sustainably sourced palm oil the norm.

In the RSPO’s annual report, the organisation noted several important developments during the year to June 30, including the surge in involvement from smallholders, a 56% increase in the area of RSPO-certified land in Africa, and a 22% increase in the amount of land certified globally. The organisation has long sought to get more smallholders on board with its sustainability goals, as more than three million palm oil producers are thought to fall into this category, each farming less than 123 acres along with other subsistence crops. Individually, they may be operating on a small scale, but together they account for about 40% of total global palm oil production.

Could smallholders trigger a tipping point for sustainable palm oil?
Smallholders account for 40% of global palm oil supply

Palm oil users – such as manufacturers of snacks, spreads and confectionery – face pressure from consumers and lobbying groups to reject unsustainable palm oil, or even to switch to other vegetable oils. However, other oils do not always work well for manufacturers, who value palm oil for its low cost, long shelf life, and processing benefits such as heat stability and solidity at room temperature – attributes that contribute to its status as the world’s most popular vegetable oil. From a sustainability perspective, too, palm oil is much more water- and land-efficient than any other land-based oil crops, yielding ten times more oil per hectare than soybeans, for example.

However, rapidly increasing demand for palm oil has led to widespread deforestation, reducing biodiversity and causing the release of carbon stores in some of the most sensitive environments on the planet.

In response, large manufacturers and a handful of governments have vowed to source only sustainable palm oil. The RSPO asserts that pushing for more sustainable production – and the involvement of all stakeholders – is the only way to avoid the expansion of unsustainable palm oil production. Moves from large food and beverage companies like PepsiCo, Mondelez, Kellogg and Unilever to reject unsustainable palm oil have already resulted in a shift toward more sustainably produced oil, but the RSPO has long struggled with the challenges of uniting smallholders behind its sustainability goals.

A crucial factor has been providing incentives for smallholders, such as guaranteeing that they will receive a higher price for their certified oil, and increasing their productivity by giving them access to knowledge on sustainability practices, technical assistance and the necessary infrastructure for sustainable cultivation.

Meanwhile, major palm oil traders like Cargill, Bunge Loders Croklaan, Wilmar and Golden Agri Resources have cut ties with suppliers linked to unsustainable practices, also helping to increase global volumes of sustainable palm oil.

Despite these moves, however, progress remains painfully slow, as global unsustainable palm oil production is increasing even faster than sustainable production. At present, about 19% of the world’s palm oil is sustainably sourced, according to RSPO figures, down from 21% in 2017, despite growing volumes and an increasing area dedicated to certified sustainable production. Attracting smallholders to embrace RSPO standards may seem like a small win for the organisation, but together, these farmers could help shift the balance toward more sustainable production.