Indonesia Palm Oil Development Scheme for Smallholders (IPODS)
Smallholders are part of the supply chain
Smallholders farm more than 40% of the oil palm plantations in Indonesia. The estimated number of smallholder farmers is about 2 millions farmers, excluding their families.
The chief domestic concern is that No Deforestation, Peat and Exploitation policies (NDPE) exclude Smallholders from the supply chain, due to suspension policies.
With the mixing of Smallholders ’ oil into the Indonesian supply base, the smallholder dilemma that comes with NDPE policies is complex.
This is the largest Independent Smallholder Project in Indonesia.
Kicked-off in June 2015, IPODS’ target by end of December 2018:
• 3,000 independent Smallholders registered
• 500 independent Smallholders certifiable under RSPO, ISPO, and ISCC
We will work on another three projects with IFC in Riau. The estimated beneficiaries will be 12,000 Smallholders .
Feedback from Baseline study on Independent Smallholders (2014)
- Independent Smallholders want agricultural training.
- They need quality fertiliser support.
- The use of certified seeds is low at only 25%.
- Only 1% of the independent Smallholders in PT. Siringo Ringo's supply chain have heard of RSPO or Minyak Sawit yang Berkelanjutan.
How is the project different?
- Independent extension platform of agronomists and farmer advisers who are recruited from the local communities.
- Electronic tag for traceability.
- Training modules that focuses on family such as nutrition for children, not just agriculture.
- Grouping the previously unorganised farmers into groups for greater bargaining power.
Former scheme Smallholders who are made independent Smallholders have gone through some form of organization and are used to partnerships with large corporations.
The project has to reach out to all the skeptical independent Smallholders , one smallholder at a time.
- Improve independent smallholder farmers access to Good Agricultural Practices (GAP) and Better Management Practices (BMP).
- Integrate at least 500 independent smallholder farmers certifiable under RSPO, ISPO and ISCC into Musim Mas supply chains for traceable CPO.
Key support strategies for smallholders
Skills for smallholders
Challenges of Project
- Smallholders are worried about legal investigations into their ownership of the land.
- The farmers did not initially visualise the benefit from the training programmes and waited to see the results.
- It took us a year to build trust among the Smallholders .
About the International Finance Corporation
International Finance Corporation (IFC), a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries.
IFC utilises and leverage its products and services—as well as products and services of other institutions in the World Bank Group—to provide development solutions customized to meet its clients’ needs. IFC applies its financial resources, technical expertise, global experience, and innovative thinking to help its partners overcome financial, operational, and political challenges.
Clients view IFC as a provider and mobiliser of scarce capital, knowledge, and long-term partnerships that can help address critical constraints in areas such as finance, infrastructure, employee skills, and the regulatory environment.
IFC is also a leading mobiliser of third-party resources for its projects. Its willingness to engage in difficult environments and its leadership in crowding-in private finance enable the corporation to extend its footprint and have a development impact well beyond its direct resources.
For more information on the International Finance Corporation, please visit their website here.