Unilever, PepsiCo, and Nestlé Purchase RSPO Credits from Farmers Associations from Musim Mas’ Smallholders Program
Indonesia, 24 June 2021 – Four farmers associations from Musim Mas’ smallholders program have just sold their Roundtable Sustainable Palm Oil (RSPO) Independent Smallholder Credits to consumer goods companies Unilever, PepsiCo, and Nestlé.
These farmers associations, certified by RSPO last year, are located in the vicinity of Musim Mas’ mills, namely PT Siringo Ringo (SRR), PT Bahana Nusa Interindo (BANI), PT Sinar Agro Raya (SAR), and PT Indomakmur Sawit Berjaya (ISB), across Riau and North Sumatra province.
Thanks to the deal, these smallholders will be receiving IDR 6 billion (approx. USD 430,000), which will be used to maintain their farmer associations and RSPO certification and improve their livelihoods. This Musim Mas’ smallholders program was jointly developed and implemented with IFC (International Finance Corporation), a member of the World Bank. IFC led the negotiation with Unilever, PepsiCo, and Nestlé, on behalf of the associations.
The chairmen of the four farmers associations received a ceremonial cheque from Musim Mas to celebrate the milestone.
Smallholders enrolled in Musim Mas’ program are exposed to a curriculum comprising of good agricultural practices, best management practices, and modules beyond agronomy, such as financial literacy. In addition, the program encourages smallholders to group themselves into farmers associations and undergo RSPO certification. Together with IFC, 2,092 farmers are now RSPO certified and received RSPO credits from 18,386 MT IS CSPO and 2,068 MT IS CSPKO produced. The smallholders program is part of Musim Mas’ sustainability policy to improve livelihoods and integrate smallholders into the deforestation-free and exploitation-free palm oil supply chain.
This is the second batch of smallholders from Musim Mas’ program to have successfully gained access to the certified sustainable palm oil market. Last year, two farmer associations from the program sold their RSPO Independent Smallholder Credits to Unilever. Musim Mas is scaling up its reach to independent smallholders via the “Smallholders Hub” concept. Within the pre-competitive Hub, Musim Mas trains government village extension officers to provide training to smallholders in their area.
“Achieving RSPO certification required a steadfast commitment from these smallholders, which must be rewarded fairly, Recognition by our customers of the challenges and achievements of smallholders is critical for an inclusive and sustainable supply chain,” said Olivier Tichit, our Director of Sustainable Supply Chain of Musim Mas. “We hope this milestone will encourage more independent smallholders to embark on their sustainability journey.”
“Without pressure and demand for sustainable palm oil from buyers and consumers, the likely outcome is more unsustainable palm oil. Unilever, PepsiCo, and Nestlé are leading the transition to a more sustainable market without leaving smallholders behind by purchasing RSPO Smallholder Credits,” said Guntur Cahyo Prabowo, RSPO Smallholder Programme Manager, Indonesia.
“For Unilever, smallholders are at the core of our strategy to tackle deforestation and improve livelihoods in the palm oil supply chain,” mentioned Martin Huxtable, Sustainable Sourcing Director, Unilever. “By investing in RSPO smallholder credits, we can directly incentivise and support the livelihoods and sustainable agriculture practices of independent smallholder farmers, whilst securing more sustainable palm oil for our products.”
“PepsiCo congratulates, recognizes and thanks the smallholders and the on-the-ground teams for their efforts to deliver sustainable Palm oil. We are very pleased to support this progressive initiative. Improving the inclusion of smallholders in global supply chains and the purchase of independent smallholder credits are policy commitments of PepsiCo and we hope to continue our work together in the future,” said Natasha Schwarzbach, Sustainable Commodities at PepsiCo.
Emily Kunen, Global Climate Delivery Leader, Forests at Nestlé said, “Nobody should be left behind if we are to truly address the issue of deforestation. Smallholders inclusion in the supply chain is central to our Forest Positive strategy. We will continue to buy from suppliers who are actively conserving and restoring forests while promoting sustainable livelihoods and respecting human rights.”