Adoption of Sustainability Practices by Smallholders: Examining Social Structure as Determinants

Abstract

Global palm oil consumption, registering at 77 million metric tons annually, presents a significant ecological challenge. The importance of fostering sustainable production is paramount. Yet, issues of deforestation and other unsustainable practices cast doubt over this objective. Sustainable certification schemes such as the Roundtable on Sustainable Palm Oil (RSPO) and the Malaysian Sustainable Palm Oil (MSPO) aim to improve sustainable practices among stakeholders, including smallholders. A low achievement rate of only 30% certified smallholders suggests impediments beyond financial constraints. This study investigates the impact of social structure, specifically communication elements like social interaction ties and shared identity, on smallholders’ adoption of sustainable certification—a viewpoint aligned with innovation diffusion theory. Employing a quantitative design and a questionnaire survey, data was collected from 300 independent smallholders and analyzed via Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings illuminate that communication through social interaction ties and shared identity significantly influences the adoption of sustainable-certified schemes by smallholders. This suggests that innovation diffusion within this sector is socially motivated, emphasizing the influential role of communication in facilitating adoption of sustainable practices among small farmers. This novel understanding offers valuable insights for researchers and practitioners in utilizing social dynamics to endorse sustainable practices within the palm oil industry. Keywords: Sustainable certification, communication, smallholders, innovation diffusion, social structure.