Opportunities and bottlenecks for upstream learning within RSPO certified palm oil value chains: A comparative analysis between Indonesia and Thailand

Abstract

Abstract Smallholders play a key role in implementing best management practices that increase productivity and reduce environmental effects. However, they often lack the knowledge to implement these standards. This study investigates if and how RSPO certification fosters upstream learning to improve farming practices. Taking a comparative approach between Thailand and Indonesia we find that the current structure of the value chain is not always well-suited for upstream learning beyond knowledge transfer. In particular, farmers in Indonesia suffer from the delegation of practices to the mill and cooperative, and from incentive-incompatible pricing practices, limiting the extent to which farmers absorb new knowledge on farming practices. In Thailand instead, price incentives based on quality are more developed, and only hindered by the presence of intermediary collectors. This makes that Thai farmers are systematically more aware of farming and environmental practices, and more likely to report compliance with RSPO principles and criteria. Their relatively higher independence in farming decision-making, however, results in weaker peer-to-peer interactions and higher deviations from best management practices, with consequences both for productivity and quality. This research highlights the major bottlenecks in upstream learning within RSPO-certified palm oil value chains in Indonesia and Thailand. Addressing such bottlenecks is a precondition to improving smallholders’ farming practices.