Smallholders in the Palm Oil Sector

The importance of smallholders in the palm oil sector is often misunderstood or overlooked, especially when it comes to their role in improving the sustainability of the industry. Sustainability criteria, including the ESG standards, are used by palm oil companies for complying to international requirements and increasing economic benefits, but the reported scores are rarely a reflection of the local reality (Moohan-Sidhu, 2018; Thoumi, 2018).

Smallholders, as defined by the RSPO, are farmers growing palm in small plantations with an area below 50 ha where the family provides most of the labor. These family farms manage 40% of the global palm oil production area, a percentage which will continue to expand due to companies facing increasing barriers for opening new large tracts of land (Jeezer et al., 2019). Independent smallholders, as opposed to those under a scheme, are the most neglected in the sector. They have more difficulty accessing financial resources and produce around 20% lower yields than company plantations (Jelsma et al., 2019). Independent farmers represent a large portion of all smallholder area—for example, in Indonesia more than half of these area, 2.54 million ha, corresponds to independent smallholders. 

A Lubuk Beringin villager, Rahimah, 70, harvests palm nuts for palm oil on her agroforestry farm at Lubuk Beringin village in Jambi province, Indonesia. Caption from: Hans Nicholas Jong/Mongabay. Photo by: Tri Saputro/CIFOR/Flickr.

Including smallholders in the palm oil supply chain and addressing their state of exclusion is crucial for attaining environmental and social results. Despite some attempts to promote the adoption of standards among small producers only a low number of independent smallholders have been certified (Sagar et al. 2019). In Indonesia, only 1% hold a RSPO or ISPO certification (WRI, 2018). Other efforts led by palm oil companies which claim sustainability objectives, such as the Indonesia Palm Oil Development for Smallholders program implemented by Musim Mas, are focused on improving the productivity and traceability of smallholders along the supply chain. However, these ultimately end up benefitting companies but having little environmental impact. These initiatives do not show clear results in terms of avoided deforestation nor accountability for the distribution of premia returns to local communities.

Including smallholders and reducing the barriers they face are crucial for attaining credible and measurable sustainability results at a significant scale. While increasing the equity of the palm oil supply chain will create its own set of challenges, such addressing the complex traceability, accessibility, and layered sourcing system, ultimately it is worth the effort.

By Sandra CHIRI, 16 Nov 2020

Faith Leaders: Evangelicals, Trump, and the 2020 US Elections

Faith leaders and voters are storming heaven with prayers as the US presidential election remains inconclusive with several states having yet to tabulate all votes. Trump’s special advisor, Paula White-Cain, has been in the forefront leading prayers for the president in a video that has since gone viral.

Khor Report’s PolTracker has gathered social media data on key faith leaders in the US. Read our results here.

The Final Countdown: The Eve of the 2020 US Elections

It’s time for the 2020 US elections, and social media is again playing its huge part as it did four years ago. While the PolTracker team has extracted data on Twitter mentions and sentiments on the current Presidential and Vice Presidential candidates, being halfway across the world makes analysing said data a bit more difficult. Instead, we had the team give their personal thoughts. Click here to read more.

The King and I? The 2020 Bangkok Protests

Thailand has been witnessing a series of pro-democracy demonstrations since July. These protests attracted lots of support from the young people and urban elites, but what makes these protests notable is that it tackles the issue of the monarchy head on for the first time. This is reflected in Thai social media, where a surprisingly audacious hashtag about the king had been used by over two million Twitter users.

Naturally, Khor Reports’ PolTracker team analysed how several selected hashtags are trending on Thai Twitter. Head over here to read our results of this analysis.

911, What's Your Emergency: Emergency Talk Sends Malaysia Abuzz (Again)

Emergency was the buzz word last week. Word spread that the ruling government sought emergency rule to break to spread of COVID-19 as the numbers continue to rise and to avert political instability. Last Friday, Prime Minister Muhyiddin Yassin had an audience with the Yang Dipertuan Agung (YDPA; the King) where he requested that he declare a state of emergency.

Curious about how social media is reacting towards this new political development, Khor Reports’ PolTracker team analysed Twitter mentions of selected hashtags and key personalities. Click here to read about our results.

Prepare for Trouble, Make it Double: Anger in Malaysia after Double Standards by Government

In the past two weeks, Malaysians have taken to the social media to vent their frustrations over the handling of the surge of COVID-19. Prime Minister Muhyiddin Yassin who had built his legitimacy on his swift tackling of the COVID-19 earlier this year saw his popular streak came to a grinding halt. Public sentiment turned against him in what they perceived as double-standard when his cabinet members were not subjected to quarantine upon returning from campaigning from Sabah.

Khor Reports’ PolTracker team took this opportunity to analyse how selected hashtags are trending on Twitter. Head over here to read our results of this analysis.

SCMP: The Wrangling in Raub Struck a Stark Contrast to the Thai Durian Export Juggernaut

A legal battle is underway between Raub durian farmers and a state-backed conglomerate. The dispute involved allegations that the farmers were encroaching and converting state government land into illegal durian plantations, as well as accusations that the Royal Pahang Durian Resources (RPDR) was exploiting the small-scale farmers by demanding unreasonable yield targets in a deal to legalise them.

The conundrum now involves an enquiry by the Malaysian Anti-Corruption Commission (MACC), who are questioning the farmers over the aforementioned land encroachment.

A recent SCMP article by Tashny Sukumaran covered the story in more detail, in which our principal Khor Yu Leng was quoted.

The wrangling in Raub struck a stark contrast to the Thai durian export juggernaut, said economist Khor Yu Leng, noting that Thailand had recorded almost US$1 billion in sales to China from March to June.

“Trade is just getting its footing and it would be unwise for people to try and muscle in,” she said.

While Malaysia has pinned great hopes on its new channel of frozen durian exports, the word from some eyeing volume to China is for volume to be flattish against 2019. Last year, China approved Malaysian imports, although this appeared to be delayed; durian insiders said there were some wrangling on the Malaysia-side over who would be allowed to export under the then-Pakatan Harapan administration.

This came as surprise as Malaysia is coming up from almost zero-base; tackling the China market seemed to offer enough room for all enterprising exporters. More recently, wrangles have appeared in the Raub area, which also supplies the famed Musang king (mao shan wang/MSW) durian. The previously described legal saga has unlicensed farmers fearing lopsided terms with a joint venture durian concessionaire-cum-marketing wannabe. In the meantime, the Thai durian export juggernaut has powered ahead with almost USD1 billion in sales to China in March-June, a record sales volume with unit prices doubling in the last two years.

ForFreeChoice: Higher Saturates in Palm Oil-Free Foods

Last year, a consumer rights think-tank called ForFreeChoice Institute released an interesting finding: palm oil-free foods have higher saturates and are less sustainable compared to their palm oil counterparts. The Italy-based organisation compared the total and saturated fat contents per 100g of both the palm oil and palm oil-free version of the 96 products. Interestingly, the result was that most of the palm oil-free products recorded a higher average of saturated fat levels in comparison to their palm alternatives.

Average levels of saturated fats by category (Source: ForFreeChoice)

The organisation claims that this finding further substantiates its longstanding opinion that “food brands are profiting from ‘free-from’ fake news”, thus misleading consumers, with Giacomo Bandini, a senior research fellow at ForFreeChoice Institute, explaining that:

“There is not much difference in the amount of saturated fats [between palm oil and palm oil free products]… [Cheese flavoured potato crisps are] the most evident exception, but that is the only one.”

BFM: Thorny Dispute Over Unlicenced Durian Farming

Segi Enam Advisors principal Khor Yu Leng was invited on BFM to talk about unlicenced durian farming in Malaysia. This follows the slew of allegations from unlicenced Musang King farmers against the Royal Pahang Durian Resources PKPP Sdn Bhd, who claimed that they had been pressured into entering unfair contracts with the state-linked company. Click on the following link to listen to the podcast: Thorny Dispute Over Unlicenced Durian Farming.

Unlicenced Musang King farmers in Pahang are crying foul over a legalisation scheme by private state-linked company Royal Pahang Durian Produce-PKPP Sdn Bhd, which stipulates a yearly rent and a flat rate for durians. We speak with Khor Yu Leng for her insights.

Image Source: EPA-EFE; produced by: Loo Juosie; presented by: Lee Chwi Lynn

SIIA Haze Outlook 2020: Policy Directions for 2019-2020

The risk assessment on the possibility and severity of a haze this year made in the SIIA Haze Report 2020 (authored by the Singaporean Institute of International Affairs (SIIA) and Segi Enam Advisors) involved analysing the recent policy directions undertaken by the Indonesian government.

Naturally, much of the analysis was focused on the Peatland Restoration Agency (Badan Restorasi Gambut or BRG), the agency first set up by President Joko Widodo in 2016 with the mandate to re-wet 2.67 million hectares of peatland across seven provinces by 2020. By end-2018, BRG reported that it has restored 780,000 hectares of peatland, although observers have pointed out that the lack of transparency and independent monitoring made it difficult to verify that claim (Jong, 2020; Gewin 2020).

BRG’s ambitious goal to re-wet 2.67 million hectares of peatland required the corporation of several agencies and a funding of at least 39 trillion rupiah (USD2.73 billion) (Jong, 2018) (Photo credit: BRG)

Recent policy efforts are also aimed to halve the number of hotspots from the 2015 count by 2019, beginning with ensuring that 2.4 million hectares of peatland remain unburned and identifying up to 731 villages as fire-prone communities (Coordinating Ministry for Economic Affairs of Indonesia/KKBP et al., 2017). The government has taken various measures in attempt to achieve this objective, including upgrading early fire responses, increasing the enforcement of existing laws regarding forest concessions, and developing adequate infrastructure (such as water management systems) in fire-prone areas.

Read the full report for more information: SIIA Haze Report 2020