In a unique partnership between Cargill, Wild Asia and Solidaridad, a group of 34 independent smallholders in Perak, Malaysia, achieved sustainable palm oil certification by the Roundtable on Sustainable Palm Oil (RSPO) on 20 March 2015.
Through the partnership, this group of smallholder farmers is now connected to a global certified sustainable supply chain, and they are leading the way for more smallholder farmers to join this program by the end of this year. The ultimate aim of the project is to develop a replicable, self-sustaining process that includes independent smallholders, dealers and mills, to achieve certified sustainable palm oil production.
In Malaysia, which is the second largest producer of palm oil in the world, Cargill, Wild Asia and Solidaridad have provided assistance and technical training to help oil palm smallholders achieve RSPO certification.
The goal of the program is to help an additional 100 independent smallholders in Malaysia meet RSPO sustainable palm oil production standards by the end of 2015. The certification, driven by Cargill as part of their commitment to achieving a fully sustainable supply chain, sets the stage for the long term production of RSPO certified palm oil in Malaysia.
The program began in 2013 and involves a comprehensive network of independent players in the supply chain. The smallholders, the oil palm fruit dealers, the mill and the refiner have come together with a common goal to improve productivity and smallholders’ incomes in a sustainable way.
To increase the participation of smallholders, encourage new entrants to the scheme and ensure the long term sustainability of the program, Cargill is currently working with the Wild Asia Group Scheme (WAGS) and the oil palm mill to provide incentives for the current group of certified smallholders to continue to produce certified sustainable palm oil.
Following the initial success of the pilot WAGS program, two new palm fruit dealers also have been engaged to participate in a similar smallholder scheme. The efforts will go towards driving progress and improving Cargill’s palm oil supply chain sustainability in Malaysia.
“Smallholder oil palm farmers are a key part of the palm oil supply chain. They are also the least prepared to achieve RSPO certification. Together with our partners Wild Asia and Solidaridad, we wanted to see how we can assist smallholders to get into the global sustainable supply chain. We are pleased with the certification of this pilot group of smallholders in Malaysia. The training has helped build the farmer’s capacity, maximize productivity, increase yields and improve their livelihoods. In the long run, the certified smallholders will benefit from the added value of having a traceable and sustainable supply chain, and be able to supply the world, sustainable palm oil, ” said Chai Wei Joo, managing director of Cargill Palm Products Sdn Bhd.
“We look forward to seeing how this initiative can contribute to a broader adoption of sustainable practices and increased production and uptake of RSPO certification in Malaysia,” Hendry Yang, Asia Pacific manager for Solidaridad explained. “This pilot project is innovative as fresh fruit bunch (FFB) dealers have an active role in providing smallholders access to good management techniques. So far, we have understood from smallholders that they recognize the benefits when the different stakeholders in the supply chain come together. They are interested to see how this arrangement will work out in the long run.”
“We appreciate the fact that Cargill, a trusted supplier of sustainable agricultural goods, is focused on promoting sustainable palm oil production among independent smallholders. More customers are demanding traceable and sustainable palm oil, and we are glad that the independent components of the supply chain are working together through this program, for the common good of the industry,” said Stevan Tan, group executive director, Tian Siang Group.
In Malaysia, there are close to 205,000 independent oil palm smallholders with a total planted area of 807,000 hectares (15 percent of Malaysia’s total oil palm planted area in 2014). These smallholders play a significant role in the rural development and economic progress of the country.
About Cargill
Cargill provides food, agriculture, financial and industrial products and services to the world. Together with farmers, customers, governments and communities, we help people thrive by applying our insights and 150 years of experience. We have 152,000 employees in 67 countries who are committed to feeding the world in a responsible way, reducing environmental impact and improving the communities where we live and work. For more information, visit Cargill.com and our News Center.
About Cargill in Malaysia
Cargill has been conducting business in Malaysia since 1978. Today, our businesses include palm oil refining and production of value added palm products, grain and oilseeds distribution, animal nutrition, supply of specialty food ingredients as well as sales and marketing of cocoa and chocolate products. Headquartered in Kuala Lumpur, Cargill currently employs about 800 people in 12 locations countrywide. For more information, visit http://www.cargill.com.my.
About Wild Asia
Wild Asia believes that an understanding of social and environmental issues is fundamental to sustainable developments. Our mission is to inspire businesses to improve their social and environmental practices to meet and exceed global standards. We aim to create change from within the industry through direct engagements with businesses which have an impact on our environment and people. The Wild Asia Group Scheme (WAGS for smallholders) is one of our platforms for providing technical support to small independent oil palm producers. It aims to address the current gaps in the sustainable palm oil supply chain by strengthening relationships between smallholders, CPO mills, traders, and large corporations. For more information, visit http://oilpalm.wildasia.org.my
About Solidaridad
For change that matters
Solidaridad is an international organization dedicated to responsible food production to feed the growing world population and to providing the world with an alternative to fossil fuels like oil and gas.
Solidaridad is convinced that the agricultural sector can produce more efficiently so that it will be able to feed the world population in 2050, as well as supply energy and plastic to the industry. Solidaridad is
investing in enterprising farmers in developing countries and putting emphasis on the improvement of their land use, so that production can increase while at the same time reducing harm to people and the environment.
Mining and industry need to switch to a responsible means of production. Worker rights need to be respected and the environment is preserved for future generations, keeping its potential intact.
Solidaridad focuses on the production chains that matter worldwide and where changes have great impact: coffee, tea, cacao, fruit, textiles, cotton, soy, palm oil, sugarcane, gold and livestock. - See more at: http://www.solidaridadnetwork.org/about
Contact: D. Chandramohan, Cargill Malaysia
+60 32 246 3104, chandramohan-dharmapalan_nair@cargill.com
Jan Maarten Dros, Solidaridad
+31 30 275 94 50, janmaarten.dros@solidaridad.nl
Reza Azmi, Wild Asia
+60 12 212 0694, reza@wildasia.org
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