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A smallholder farmer receives his certificate from the ISPO Secretariat

A smallholder farmer receives his certificate from the ISPO Secretariat

Indonesia, 22 November 2021 – More than 1,200 independent smallholder farmers from Musim Mas’ Smallholders Program have become the first in Indonesia to be certified under the Indonesian Sustainable Palm Oil (ISPO) Ministry of Agriculture Decree No.38 of 2020 (ISPO 38/2020) standard. These smallholders’ estates collectively cover over 2,700 hectares of land, representing more than 20% of the total 12,600 hectare of ISPO-certified land under the new regulation. This represents the largest group of independent smallholders to gain certification under the new standard.

The smallholders are part of three farmers associations – Asosiasi Pekebun Swadaya Kelapa Sawit Labuhanbatu (APSKS LB), Perkumpulan Pekebun Swadaya Kelapa Sawit Rokan Hulu (PPSKS Rohul) and Asosiasi Pekebun Swadaya Kelapa Sawit Pelalawan Siak (APSKS PS), located across North Sumatra and Riau provinces. Musim Mas plays a facilitator role in the farmers associations.

Established in 2011, the Indonesian ISPO standard ensures that Indonesian palm oil products can access the global markets and support the achievement of Indonesia’s smallholder commitments. Certification also benefits farmers by encouraging sustainable practices, ensuring the legality of owned land, and compliance with local laws and regulations. Since then, the certification scheme has been enhanced through the Ministry of Agriculture Decree No.11 of 2015 and more recently with Decree No.38 of 2020 (ISPO 38/2020), which aims to expand certified areas and continually improve the quality of certification.

ISPO certification is mandatory for all oil palm companies in Indonesia, including smallholders. They are required to be ISPO-certified by 2025. Additionally, ISPO 38/2020 expands the protection of forests from primary forests to forests in general.

Smallholders face complex and interlinked challenges around yields, plantation management, land ownership, financial access, market access, and economies of scale. To contribute to livelihoods and the betterment of the industry, Musim Mas has developed and implemented programs to integrate independent smallholders into palm oil supply chains since 2015.

We engage and assist smallholders in meeting the same efficient farming standards as industrial plantations and completing program modules covering agronomy and NDPE commitments, thus empowering them to produce sustainably. To assist smallholders with access to financing and legal land titles, the International Finance Corporation (IFC)-Musim Mas smallholder program was also established in 2015. Access to financing has the potential to help smallholders replace ageing palms, switch to higher yield seeds, purchase fertilizer, or obtain relevant certifications. As of 2020, over 32,100 smallholders have been engaged, of whom 14% supply directly to Musim Mas. The remaining 86% smallholders have had the same access to and benefited equally from the program.

Since 2020, Musim Mas has also developed Smallholder Hubs in Aceh, engaging smallholders on a district level. These hubs create a common platform where palm oil companies can share their expertise and resources to train agricultural officers who can then train independent smallholders within a specific district, regardless of to whom they sell.

“Musim Mas is firmly committed to improving the livelihoods of independent smallholders and the production of sustainable palm oil. As a key player in Indonesia’s palm oil industry, we are glad to support the government’s drive to increase ISPO certifications by reaching out to independent smallholders. We will also continue to expand our program for smallholders. Through which, we aim to empower them with technological skills, sustainable agricultural practices, and help them integrate into sustainable palm oil supply chains and marketplace,” said Rob Nicholls, General Manager of Programs and Projects, Musim Mas.

Mr. Dedi Junaedi, Head of National Secretariat RAN KSB and Deputy Head of Secretariat of the ISPO Committee commented “On behalf The Directorate of Estate Crops, Ministry of Agriculture of the Republic of Indonesia, we are highly appreciative of Musim Mas’ efforts and we would like to express our congratulations. We Hope this achievement by Musim Mas and its partners may motivate & inspire other independent smallholder palm oil cooperatives/ associations to participate in the ISPO certification program, which is also a component of the President Instruction (Inpres) Number 6/2019 on the National Action Plan on Sustainable Palm Oil Development for 2019 – 2024 (RAN KSB),” said Mr. Junaedi.