On Thursday 15 September, Solidaridad launched the first Global Palm Oil Barometer. The focus of the discussion was smallholders, the secret ingredient of sustainable palm oil production: they are key to improving sustainable development and achieving zero deforestation. Supporting smallholders to produce sustainably will be a key challenge in the coming years.

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Smallholders make immense efforts to contribute to rural economic development and biodiversity conservation. The world cannot overlook them: their exclusion would result in greater poverty, lower living conditions and individual rights for billions of people globally, and a substantial failure to address climate change.

OVER 3 MILLION SMALLHOLDERS 

Although smallholder farmers play a pivotal role in the palm oil sector, they are often neglected in the sustainability agenda as policies tend to focus on large industrial plantations. More than 3 million smallholders produce about 30% of the world’s palm oil. Their contribution is expected to increase as industrial-scale companies are forced to limit expansion due to zero deforestation commitments. 

As declared by Shatadru Chattopadhayay, Director General of Solidaridad Asia: “Smallholders produce not even 2% of the certified sustainable palm oil on the market, while contributing 30% of the world’s supply. Governments and businesses must make smallholder inclusion part of their sustainability criteria”. 

SMALLHOLDERS INCLUSIVENESS 

Palm oil is an attractive crop for smallholder farmers because it is more profitable than others. However, in a volatile and difficult market, with rising input prices, income is precarious. 

In 2020, small farmers generated USD 17 billion of the palm oil industry’s USD 282 billion turnover. Not enough to cover their families’ essential living costs and to invest in innovation or adhere to sustainability standards.

As stated by Heske Verburg, Director General of Solidaridad Europa, “Companies and governments in consuming and producing regions must include smallholders’ interests when developing and implementing policies. The EU should ensure that smallholders will be supported to meet the requirements of the EU Regulation on deforestation-free products and in partnership with producing countries tackle the root causes of deforestation, including poverty”.

>> Re-watch the event Small-Holders: Drivers of Prosperity and Sustainability <<