Independent Smallholders

Independent smallholders are self-managed and are not tied to any particular company. Thus, they often lack access to updated farming practices needed to improve their productivity. Also, 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.

As smallholders depend on the forests and environment for their livelihood, it is essential to promote sustainable production of oil palm to ensure resilience and long-term economic growth.

Our Milestones

Our Approaches

Through our proven experience working with IFC on independent smallholders, we are geared with the expertise to refine our independent smallholders program further. We have developed and implemented two approaches that aim to improve the livelihoods of independent smallholders: Training for Smallholders and Training for Trainers: Smallholders Hub.

TRAINING FOR SMALLHOLDERS

We aim to integrate independent smallholders into sustainable palm oil supply chains through this program. This program provides smallholders with agronomic training, access to financial support and global markets, and education on legal requirements.

Our approach to engaging the smallholders and curriculum has evolved as our program expanded, reflecting the challenges that smallholders are interested in or face on the ground.

Our modules mirror the RSPO’s Principles and Criteria (P&C) as we prepare them for RSPO certification. It categorizes the program modules within four pillars: Environment, Business management, Social and Other challenges that smallholders may face in their journey towards sustainable palm oil. Check out our report for more details on each pillars.

Improving independent smallholders’ access to finance empowers them towards better profitability, social cohesion, and environmental protection. To facilitate this process, Musim Mas financed a working paper by the Singapore Institute of International Affairs (SIIA) to explore the prospect of providing green financing to independent smallholders.

As part of the program, we have supported the largest number of independent smallholder farmers certified by the RSPO (Roundtable on Sustainable Palm Oil) in Indonesia. As of September 2022, a total of 3,537 farmers from Musim Mas’ smallholder program have achieved RSPO certification. The total certified area is now around 8,500 hectares.

Over the years, Musim Mas efforts included connecting smallholders to the international market. In 2021, Unilever, PepsiCo, and Nestlé purchased RSPO Credits from farmers associations in Musim Mas’ Smallholders Program. Between the year 2020 to 2022, Musim Mas has helped independent smallholders achieve RSPO Credits worth over USD 1.3 million.

More than 36,000 Smallholders trained

More than 77,200 Hectares

1,604Smallholders
ISPO certified

3,537 Smallholders
RSPO certified

Approximately USD 1.3 million Worth of RSPO Credits
for Smallholders as of October 2022

data as of November 2022

Click here for more details.

Landscape Projects and Collaboration

We believe in collaborating with governments, NGOs, and downstream players such as consumer goods companies to achieve palm oil sustainability.

MUFG Bank, PT. Bank Danamon Indonesia Tbk, and iAPPS

Strengthening our existing financial literacy classes for smallholders, we collaborate with MUFG Bank, PT. Bank Danamon Indonesia Tbk (Danamon), and iAPPS to develop the AgriON platform.

AgriON is a scalable and bank agnostic digital payment and financing solution driving traceability and sustainability across the agricultural supply chain. More here

Danone, L’Oréal, Mars, Livelihoods Funds, and SNV

We have partnered with Danone, L’Oréal, Mars, Incorporated, the Livelihoods Funds, and SNV to advance regenerative agriculture in North Sumatra, Indonesia.

The project, spanning 10 years, aims to sustain a deforestation-free supply chain, regenerate 8,000 hectares of degraded land, restore local biodiversity in 3,500 hectares, and improve the livelihoods of 2,500 independent smallholder farmers. More here.

UNDP

The Regional Government of Pelalawan District launched an extension program and assistance for oil palm planters on February 19, 2019, in Pelalawan district, Riau. This program aims to encourage increased palm oil productivity with the principle of sustainable intensification. Through this program, it is expected that 2,000 farmers will receive Good Agricultural Practices (GAP) training, be ready for ISPO certification and be eligible for the Smallholders Replanting Program (PSR) program.

As a form of partnership between the public and private sectors, this program is also supported by various parties. The program initiated by the Ministry of Agriculture, Pelalawan District Government and UNDP is also supported by PT Musim Mas and IKEA. IKEA provides financial support for a variety of program activities. Meanwhile, PT. Musim Mas actively trains field assistants, specifically related to Best Cultivation Practices that have been implemented by Musim Mas. More here.

Click here for the progress report

TRAINING FOR TRAINERS(Smallholders Hub)

Our Smallholders Program embed valuable skills within the smallholders and communities through the Smallholders Hub approach. Instead of training the smallholders directly, we build greater capacity by training local government agricultural officers, also known as Village Extension Officers (VEOs).

We train VEOs on Good Agricultural Practices (GAP) and No Deforestation, No Peat, and No Exploitation (NDPE) principles. These officers then share their expertise with independent smallholder farmers and equip them with the knowledge needed for responsible farming.

7 Smallholders Hubs
established
More than 340 VEOs trained
by Musim Mas
More than 4,300 Smallholders
trained by VEOs
More than 7,100 Hectares
data as of November 2022

Click here for more details.

Landscape Projects and Collaboration

We believe in collaborating with governments, NGOs, and downstream players such as consumer goods companies to achieve palm oil sustainability.

ETH Zürich, IPB University

Musim Mas, the top-ranked Swiss university Eidgenössische Technische Hochschule Zurich (ETH Zurich), and IPB University (or the Institut Pertanian Bogor) in Indonesia, collaborate to investigate the conditions under which supply chain sustainability initiatives can lead to reduced deforestation in the palm oil sector in Indonesia while safeguarding producers’ inclusion. In particular, the joint research will measure how Musim Mas’ Smallholders Programs, such as the Smallholders Hubs, can contribute to such sustainability goals.

Together with ETH Zurich, Musim Mas will collaborate to produce longitudinal research on oil palm smallholders and measure the impact of its work on smallholders. Starting in December 2021 in Sumatra, Indonesia, the study will be one of the first in the industry to see what it takes to balance environmental and economic considerations for supply chain initiatives to work. More here.

General Mills

Musim Mas and General Mills launched a joint program to build robust and sustainable extension services for the oil palm farmers in Aceh Singkil, Indonesia. The initiative is part of an overall strategy to reduce deforestation by improving livelihoods. Targeted at independent smallholders from villages neighboring the Leuser Ecosystem, the two parties will collaborate to integrate smallholder growers into the sustainable palm oil supply chain and reduce deforestation.

The program is part of Musim Mas’ vision to establish Smallholders Hubs that serves as a pre-competitive platform where companies can pool resources and share their expertise to train farmers. The primary objective is to develop sustainable extension services, benefiting the communities and the local government. More here.

AAK, Nestlé

AAK, Nestlé, and Musim Mas partner to address deforestation outside of plantation concession areas in Aceh, Indonesia.

AAK and Nestlé have pledged to fund the first two years of the five-year program, reaching out to approximately 1,000 oil palm independent smallholders within two years and enrolling them in Musim Mas’ Smallholders Program supported by a Smallholders Hub. The Smallholders Hub will provide advanced training to village extension officers on good agricultural practices and NDPE (No Deforestation, No Peat, and No Exploitation). The officers will then train and upskill oil palm smallholders in their assigned areas. Musim Mas will be training 40 officers. This will be Musim Mas’ third Smallholders Hub in Aceh province, in line with their Aceh strategy. More here.

Small Producers, Big Responsibility

These small producers hold a big responsibility in producing oil palm sustainably. The program teaches them good agricultural practices and financial management, and encourages them to apply for sustainable palm oil certification standards.

Watch Here

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