The Agrarian, Structural and Cultural Constraints of Smallholders’ Readiness for Sustainability Standards Implementation: The Case of Indonesian Sustainable Palm Oil in East Kalimantan

Arya Hadi Dharmawan,Faris Rahmadian,Bayu Eka Yulian,Jaboury Ghazoul,Rizka Amalia,Pablo Pacheco,Heru Komarudin,Dyah Ita Mardiyaningsih

doi:10.3390/su13052611

Abstract

The expansion of oil palm plantation has caused adverse impacts on the ecosystem. It has been associated with deforestation, biodiversity loss, disturbances to environmental services and livelihood change. The government of Indonesia has made an effort to control the negative effects by issuing relevant policies. One of the policies is Indonesian Sustainable Palm Oil (ISPO)’s sustainability standards to which large-scale plantations and smallholders are obliged to adhere. This study assesses the readiness of two types of smallholders, namely, the nucleus–plasma scheme and independent smallholders to adopt ISPO standards. Using a case study research approach in two oil palm plantation villages in East Kalimantan, the study found out a number of ISPO implementation challenges, grouped into structural and socio-cultural challenges, which make smallholders less ready to adhere to this mandatory policy. Coping with these challenges, this study proposed that land and business legality programs be expedited to strengthen property rights, and that training and education programs be intensified to enhance awareness, knowledge and capacity of smallholders to enable them to comply with sustainability standards.

Highlights

This paper focuses on how Indonesian Sustainable Palm Oil (ISPO) has been implemented at smallholder or farming household level
The economy of Muara Kaman Ulu (MKU) Village was largely affected by the presence of two large-scale oil palm plantation corporations
Corroborating earlier studies on smallholders and mandatory sustainability [33,49], this study found that lack of land legality documentation is a major issue hindering smallholders to get ready for verification under ISPO certification

Summary

Introduction

Oil palm is a flex crop that can be used as food, feed, fuel, or as an industrial material. The cultivation system of oil palm is more efficient, making it have a higher competitive advantage than other commodities such as soybeans and rapeseed. Its high productivity and lower cost of cultivation bring substantial and attractive benefits either at micro business unit or at macro-economic system [1,2]. Palm oil generates significant added value in the economy and in creating employment opportunities, as well as boosting regional economic development. For the case of Indonesia, export values of palm oil amounted to USD 23 billion in 2017 [3]. Palm oils, produced either for domestic uses or global markets, satisfy the needs of food industry, cooking oil, and bio-energy industries

Methods

Results

Discussion

Conclusion