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This article is based on the perspectives shared by Musim Mas’ Director of Sustainability, Olivier, Tichit, at the Singapore Institute of International Affairs (SIIA) 11th Singapore Dialogue on Sustainable World Resources event, held on 9 May 2024 at the Fullerton Hotel, Singapore. Mr Tichit shared his view as part of a panel titled “The Road Ahead for Resource Sector – Policy and Market Directions.”

Singapore Institute of International Affairs workshop

“How do we train the farmers of tomorrow to make farming attractive for the next generation? How do we give the farmers of tomorrow the knowledge and capacity they need to be productive enough to meet the demands of tomorrow?”

These were the fundamental questions and considerations put forth by Mr Tichit in sharing Musim Mas’ perspective that in order for the palm oil sector, as the world’s leading source of oils and fats, to meet the demands of the future, farmers need to be empowered. This empowerment comes in the form of equipping them with the knowledge and skills to produce sustainably. This entails not only care for the environment, but also with improved yields.

Going Beyond Our Own Operations to Build Capacity

Musim Mas strives to exceed industry standards, such as those by the Roundtable on Sustainable Palm Oil (RSPO), and to achieve yields beyond the industry average. As a leading sustainable palm oil major, we also believe in the importance of going beyond our own operations to meet the demand of the future sustainably. In 2015, Musim Mas began working with the International Finance Cooperation to train independent smallholder farmers to improve productivity and produce sustainably even though the Group does not source directly from smallholders.

Musim Mas’ Smallholder Program provides training in modules covering environmental matters such as replanting and no-burning, business management skills and financial literacy, social issues such as developing alternative livelihoods, and other matters such as administration. Since then, Musim Mas’ Smallholder Program has grown to become Indonesia’s largest and most extensive.

Why Smallholders Are Key to Palm Oil Sustainability

Smallholders are self-managed farmers who typically manage around 2 hectares of planted land in the Indonesian palm oil sector. They make up over 40% of palm oil production in terms of planted areas, and based on data from the World Resources Institute Indonesia, that figure is set to rise to 60%.

They often lack access to updated farming practices needed to improve productivity. Additionally, they might not have the financial resources to replant aging palms leading to lower yields. The result is lower profitability and sustainability standards. Research from the International Finance Corporation (IFC), a member of the World Bank, shows that independent smallholders’ yield can be as much as 116% below company plantations in Indonesia.

Build Capacity to Meet the Demands of Tomorrow

smallholder statistics

With Musim Mas’ years of experience training smallholders since 2015, the Group expanded its support by establishing Smallholders Hubs where the Group trains local agricultural extension officers, known as Village Extension Officers (VEOs) in Indonesia, on a Training-for-Trainers basis. With this approach, VEOs can, in turn go on to train even more smallholders over time, essentially building capacity at a local government level.

“We as a private sector player can’t replace the role of the government, but what we can do is to offer support with our industry experience in the interest of fostering resilient farmers,” Mr Tichit explained Musim Mas’ approach to the Group’s Smallholders Hubs. Currently, Musim Mas maintains six Smallholder Hubs across Indonesia. In addition to VEO training, Musim Mas also conducts landscape-based collaborations with off-takers of palm oil, such as consumer goods companies, academics, and the local communities.

Musim Mas’ perspectives were echoed by a co-panellist, Mr Joseph D’Cruz, CEO of RSPO, on that sustainability isn’t just about meeting external requirements such as reporting but about “helping businesses stay in business by ensuring resources are not depleted and are able to sustain them effectively into the future.”

As the world’s population grows, the demand for oil and fats will continue to rise, as will constraints on resources such as land and water. The need to train the farmers of tomorrow to produce sustainability will become increasingly urgent. In this spirit, Musim Mas continues to go beyond its own operations to build capacity at the local government and landscape levels.