- The Roundtable on Sustainable Palm Oil's latest impact report found the number of smallholders jumped 165% from July 1, 2018 to June 30 of this year. Membership has grown by 11% since 2018 to 4,349 members — representing all links in the palm oil supply chain.
- RSPO, which is based in Malaysia, said in a release the figures on smallholder growth were particularly encouraging because it has been trying to promote their inclusion while also making sure core sustainability requirements are upheld.
- “Without more pressure and demand from the downstream market, the likely outcome is more unsustainable palm oil,” Datuk Darrel Webber, RSPO's CEO, said in a statement.
Consumers have increasingly become aware of environmental and social challenges connected with palm oil production such as deforestation, destruction of wildlife habitat and child labor. But an increase in small and sustainable certified producers could help to change that perception.
Growth in the number of smallholders comes just as RSPO is holding its annual conference in Thailand, where CEO Datuk Darrel Webber said in the release that an independent smallholder standard would be discussed for adoption. He also said he was confident the numbers would continue to increase in the coming years.
The group defines smallholders as farmers who grow palm oil in areas of less than 123 acres along with other subsistence crops. Even though the areas are small in comparison to large commercial plantations, there are more than 3 million of them comprising about 40% of total global palm oil production, RSPO noted.
Large manufacturers inclduing Mars, Nestlé and Hershey have pledged to limit their use of palm oil, although they also have also been criticized for not living up to their commitments. There are success stories such as Mondelez's Enjoy Life Foods, which last year became the first food company to be Certified Palm Oil Free by the International Palm Oil Free Certification Accreditation Program. According to Eco-Business, Quaker Oat biscuits made by PepsiCo, Nissin’s Cup Noodle, Plain Crackers by Meiji, Oreo cookies from Mondelez and Ferrero’s Nutella spread are all RSPO-certified.
More big companies could work with the growing number of RSPO-certified palm oil producers. The group has a dedicated platform connecting them with potential project partners to provide additional resources and support to help them achieve a sustainable living. Certification also helps smallholders increase yields, penetrate international markets and reduce the risk of land conversion, RSPO said. Large food companies could benefit not only by working with RSPO-certified palm oil producers when it comes to the environment, but gain from the positive halo of helping smaller farmers.
The environment also can benefit when smallholders are RSPO-certified and adopt best management practices to limit or eliminate harmful pesticides and other chemicals. The group encourages those in palm oil farming areas to learn how to protect natural resources and acquire the tools and resources to do so, according to Food Ingredients First. About 85% of all palm oil is produced and exported from Malaysia, Indonesia and Papua New Guinea.
While sustainability is a key part of RSPO's work, the demand side is also key. Palm oil is relatively cheap, and manufacturers continue to use it in a variety of baked goods and CPG items. The advantages of palm oil are that it has a long shelf life, stability at high temperatures and can solidity at room temperature. As a result, palm oil has become a popular alternative to partially hydrogenated oils.
More products are starting to carry a palm oil-free claim though, according to Innova Market Insights figures cited by Food Ingredients First. Bakery launches were at the top in 2017 with 55% of new products stating they were palm oil-free, followed by 7% of spreads, 5% of cereals, 4% of ready-to-eat meals and side dishes and 3% of baby and toddler food.
RSPO wants to shift manufacturers and retailers to only using 100% certified sustainable palm oil, but that goal appears elusive unless more consumers insist on it and vote with their wallets. The picture is further complicated when consumers don't want to pay a premium for sustainable palm oil when it's available. So although more growers are getting certified and focusing on sustainability, there are still challenges ahead.