Perspectives on sustainability – making supply chains work for smallholders

The study examined the alignment between the sustainability perspectives of palm oil smallholders in Indonesia's Riau province and the frameworks of the Roundtable for Sustainable Palm Oil (RSPO) and Indonesian Sustainable Palm Oil (ISPO) schemes. While smallholders define sustainability through the long-term viability of their families and communities—emphasizing access to credit, inputs, and fair pricing—the study found that the rhetoric of both RSPO and ISPO has evolved to include these priorities. However, the effectiveness of these schemes remains limited by low smallholder participation; as of 2016, only 3,500 independent households and 80,300 'plasma' scheme producers in Indonesia were certified, despite smallholders accounting for 36% of total production.

• Smallholders account for 36% of oil palm production, yet certification rates remain very low. In 2016, only 3,500 independent households and 80,300 producers under 'plasma' schemes (leasing land from mills) in Indonesia were certified.
• Smallholders perceive sustainability primarily as the ability of their plantations to support their families and communities across generations. Their primary challenges include limited access to credit, markets, inputs, and knowledge on pest management and productivity, as well as low bargaining power in contracts with companies.
• The study's initial hypothesis—that certification schemes ignore smallholder priorities—was proven false. Both RSPO and ISPO have updated their strategies and documents since 2017 to include smallholder concerns such as legal support, fair pricing, and training.
• Despite the alignment in rhetoric, the ISPO scheme lacks specific guidance for smallholders in its Principles and Criteria (P&C), and there is a lack of available information regarding the final version and monitoring of the Indonesian National Action Plan for Sustainable Palm Oil (NAP).

APA

Stockholm Environment Institute (2019). Perspectives on sustainability – making supply chains work for smallholders. https://www.sei.org/wp-content/uploads/2019/03/sei-2019-p2cs-palm-oil-sustainability-smallholders.pdf

Chicago

Stockholm Environment Institute. Perspectives on sustainability – making supply chains work for smallholders. 2019. https://www.sei.org/wp-content/uploads/2019/03/sei-2019-p2cs-palm-oil-sustainability-smallholders.pdf.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Perspectives on sustainability – making supply chains work for smallholders |date=March 2019 |url=https://www.sei.org/wp-content/uploads/2019/03/sei-2019-p2cs-palm-oil-sustainability-smallholders.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2019perspectives, author = {{Stockholm Environment Institute}}, title = {{Perspectives on sustainability – making supply chains work for smallholders}}, institution = {Stockholm Environment Institute}, year = {2019}, month = mar, url = {https://www.sei.org/wp-content/uploads/2019/03/sei-2019-p2cs-palm-oil-sustainability-smallholders.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }