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Improving smallholder inclusiveness in palm oil production

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A global review of improving smallholder inclusiveness in palm oil production, presented by Rosalien Jezeer (Tropenbos International) at FTA 2020 Science Conference.
Author(s): Maja Slingerland (WUR), Carina van der Laan, Nick Pasiecznik (Tropenbos International)



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Improving smallholder inclusiveness in palm oil production

  1. 1. 1 Session Stream Author(s): Improving smallholder inclusiveness in palm oil production A GLOBAL REVIEW Rosalien Jezeer (Tropenbos International) 15/09/2020Inclusive value chains, finance and investments Inclusive business models and value chains Maja Slingerland (WUR), Carina van der Laan, Nick Pasiecznik (Tropenbos International)
  2. 2. 2 Here we present a few cases, focussing on innovative business models which showcase different institutional set-ups and financing schemes From different perspectives: corporate, project or farmer/producer led
  3. 3. 3 #1 Model: Co-ownership • Co-owners of mills • Farmers organised themselves into farmer organisations to have negotiation power • Take large diversity of smallholders taken into account • Financial support, supervision and project management was provided #2 Model: Co-ownership • Company profits paid back in kind (seeds, fertilizers, etc.) • Participation in refinement increased inclusiveness and smallholder profits • Initial external support is required Honduras Solidaridad Peru Oxfam
  4. 4. 4 #3 Model: Village business units • Managed by professionals, independent of village officials • Majority of capital is owned by village, invested in schools, health centre, etc. • Good institutional governance is key to increase smallholder inclusiveness to distribute benefits equally #4 Model: Producers as shareholders • Some landowners become shareholders • Formula to determine price with guarantee to buy all produce irrespective of quality • By eliminating layer of intermediaries, farmers are more directly involved in value chain, also easier to certify Indonesia, Tropenbos Indonesia Papua New Guinea and Solomon Islands NBPOL
  5. 5. 5 Key findings and results • Empowering smallholders is an essential pre-requisite for increased inclusiveness. • Smallholders benefit when they can take on more roles in the supply chain (e.g. co-owning mills). • Companies must consider smallholder producers more as partners and co-investors. • Build trusting relationships with smallholders is crucial, and patience is paramount. • Inclusive palm oil production requires innovative technological and business models.
  6. 6. 6 Related Tropenbos work You can find the ETFRN publication here Work on business and finance Work on other commodities as well, including cocoa and coffee Thank you!

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