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)

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
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
#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
#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
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
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!