Musim Mas program helps Indonesian palm oil growers receive US$733,000
JAKARTA, INDONESIA/ACCESSWIRE/September 23, 2022/ Musim Mas
Today, Musim Mas, one of the largest fully integrated palm oil companies in the world, announced that the current group of independent farmers from its smallholder extension program have successfully sold their palm oil certified sustainable product to international buyers via the RSPO trade platform.
2,295 independent smallholders from farmer associations in North Sumatra province (Rantauprapat) and Riau province (Pelalawan, Rokan Hilir and Rokan Hulu) received nearly IDR 11 billion or USD 733,000 from the transaction. Combined with similar sales in 2020 and 2021these four associations won close to $1.3 million.
Associations are part Training of Musim Mas Independent Smallholders and the RSPO certification program which started more than five years ago under the Indonesian Palm Oil Development Program for Smallholders (IPODS). Musim Mas developed the original IPODS program with the International Finance Corporation (IFC) to encourage and enable independent palm oil producers to achieve certification by the Roundtable for Sustainable Palm Oil (RSPO), recognized worldwide.
“It is a significant achievement for smallholders to be certified, as it opens more doors for them to sell their volume of palm oil to global buyers looking for sustainable palm oil,” said Rudman Simanjuntak, Director of Independent Smallholders at Musim Mas.
Integrating independent smallholders into a sustainable palm oil supply chain
Smallholders manage a substantial 41% of the total oil palm plantation in Indonesia. They play a key role in the production of palm oil for national and international markets and are the key to increasing the amount of palm oil that meets sustainability standards (RSPO and ISPO). However, independent smallholders struggle due to a lack of technical knowledge, limited access to quality planting material and finance. They rely on friends and neighbors, who often have little formal training.
Musim Mas engages directly with independent smallholders and provides them with agronomic training, access to financial support and global markets, and training on legal requirements. This training uses a comprehensive curriculum that reflects the RSPO Principles and Criteria (P&C) to help smallholders close the gap between their former farming practices and those required for RSPO certification. RSPO-certified smallholders gain access to sustainable global palm oil supply chains and premium markets.
“Trying to transform an industry is a process – the RSPO Credits supply chain model is an important entry point for member smallholders to become certified as sustainable,” says Guntur Cahyo Prabowo, Acting Smallholder Program Manager. RSPO operators. “In the long term, their efforts will help transform the market into a more socially just and environmentally sustainable industry. The bonus received is not only a viable business opportunity, but also a reward for contributing to the transformation of the market.
Musim Mas, a 100% RSPO-certified major, believes in investing in smallholders. This training program is part of Musim Mas’ commitment to improving the livelihoods of palm oil producers in remote areas of Indonesia by helping them increase their income. The program helps smallholders access finance, enabling them to replace aging palm trees, plant high-yielding seedlings and manage their oil palms while meeting certification standards.
Most smallholders cultivate relatively small plots; the average size is about two hectares. Many were unfamiliar with modern scientific methods before joining the program. “An important lesson we learned in the program is to focus on increasing yields, not deforestation of new areas,” said Kateni, president of the Rokan Hilir Association of Independent Palm Smallholders. oil in Riau. “This training has taught our members better and more sustainable methods of oil palm cultivation.”
The training program includes modules on financial management and health and nutrition. “Joining the program and then becoming RSPO certified has brought significant improvements to our quality of life, and we are grateful for that,” said Joko Prasetyo, president of the Pelalawan Siak Association of Independent Palm Oil Smallholders in Riau. “Our members take great pride in being recognized as sustainable and responsible farmers.”
RSPO certification opens up new markets
By achieving RSPO certification, independent smallholders can then qualify to join RSPO’s PalmTrace trading platform. Selling on the platform allows smallholders to earn a premium on their certified oil palm products. Because products traded on PalmTrace are certified as sustainable, major international buyers use the RSPO platform to source sustainably. These most recent sales by the four associations saw Unilever, Nestlé, ACT Commodities and Waitrose Ltd as buyers.
“The purchase of RSPO credits is essential to encourage the production of certified sustainable palm oil and a sustainable supply chain,” said Rudman Simanjuntak, director of independent smallholders at Musim Mas. “As our smallholder program grows, we hope to see more smallholders benefit from certification.”
As smallholders depend on environmental services for their livelihoods, promoting sustainable oil palm production is key to ensuring resilience and long-term economic growth.
Ikhsan Gunawan, chairman of the Rokan Hulu group of independent oil palm farms in Riau, said, “We used to grow oil palm the old-fashioned way. We never imagined that we could do business with international companies. it’s possible.”
“Empowering independent smallholder farmers is fundamental to Unilever’s approach to sustainable sourcing,” says Rauf Prasodjo, Senior Director of Sustainable Sourcing at Unilever. “Smallholders are critical to the success of any sustainable supply chain, and we know that investing in independent smallholder certification through the RSPO and purchasing the associated credits can drive positive change.”
Mégane Chesné, Global Sustainable Sourcing Leader, Palm Oil at Nestlé, said: “Helping smallholder farmers produce sustainably is an integral part of our ambition to advance regenerative food systems at scale. We will continue to work with our direct suppliers like Musim Mas to help improve the resilience and livelihoods of smallholder palm oil farmers. This includes purchasing RSPO credits from independent smallholders to support their journey towards sustainable palm oil production.
Contact details of Musim Mas
For more information, please contact:
Reza Rinaldi Mardja, Corporate Communication
Email: [email protected]
About Musim Mas
Musim Mas is one of the largest integrated palm oil companies with an operational presence in 13 countries in Asia-Pacific, Europe and the Americas. Our main operations are in Indonesia, ranging from cultivation to refining and manufacturing. Our global workforce pursues innovative and sustainable developments, ensuring product quality, safety and efficacy as the industry evolves.
As one of the most important players in the industry, it aspires to be a responsible leader in the evolution of the industry, ushering in a new era of sustainability with innovation. To that end, we are taking active steps to go beyond industry-recognized sustainability standards and will continue to intervene in response to critical industry issues in our quest to contribute to a more sustainable industry and a fair world.
About the Smallholder Training Program
Musim Mas, in collaboration with the International Finance Corporation (IFC), a member of the World Bank, developed the Indonesian Palm Oil Development Program for Smallholders (IPODS) in 2015 following a diagnostic study study conducted by IFC in 2013. The IPODS was tested in four of Musim Mas’ factories in North Sumatra (Rantauprapat) and Riau (Pelalawan, Rokan Hilir and Rokan Hulu), Indonesia.
These mills, which source mainly from independent smallholders, continue to engage with these smallholders, but the training program has now been replicated and expanded to cover 36,000 smallholders working 76,800 hectares in Sumatra (Aceh , North Sumatra, Riau, South Sumatra), West Kalimantan and Central Kalimantan.
The training program for smallholders aims to improve the livelihoods of smallholders by integrating them into sustainable palm oil supply chains. Integration would not only bring financial value, but also lasting value, where their environment and community would benefit.
THE SOURCE: Musim Mas
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