The importance of smallholders

Unlocking the potential of smallholder farmers through sustainable agriculture will play a vital role in transforming the palm oil industry and strengthening our supply chain.

Palm oil village

Bringing more smallholders into our supply chain

Green farmer icon

Of all palm oil globally comes from smallholder farmers

Over 3 million smallholders produce approximately 40% of the world’s palm oil. Our ambition to make sustainable palm oil commonplace means working with partners to support programmes that enable small-scale farmers to thrive. The objective of our smallholder programmes is to increase profitability for farmers by improving the sustainability of farming practices, professionalising smallholder farming business and promoting RSPO certification.

Increasing the amount of sustainable palm oil we buy from suppliers who can trace it to known smallholders is a real opportunity for us, to both help transform the sustainability of the palm oil industry and ensure that we have a secure supply of a vital ingredient.

But many smallholder farmers face issues in terms of their productivity, profitability and sustainability. These include land tenure challenges, poor agricultural practices and a lack of access to markets or to finance for replanting and certification.

We want to include more smallholders in our supply chain and help them overcome these barriers. We’ve been developing a range of programmes that support sustainable agricultural practices, improve the visibility of our supply chain and, in many cases, enhance the livelihoods of smallholder farmers.

Our smallholder programmes

We interact with smallholders through ground-level projects supported by Unilever and implemented by partners. We also purchase RSPO Smallholder Certificates, creating a market for smallholder-grown palm.

Our field programmes unite traditional extension approaches and digital technology to monitor, analyse and change farming practices for improved sustainability and profitability. Our smallholder programmes have the following common elements:

  • socialisation activities to identify motivated farmers and promote project activities
  • smallholder plantation mapping: methodologies include either ground or aerial mapping or both
  • farmer training and support packages: Good Agricultural Practice (GAP) and training on our Sustainable Palm Oil Sourcing Policy, including ‘No Deforestation, No Peat and No Exploitation’ (NDPE); and group formation and strengthening
  • facilitation of access to goods and services, including inputs and seedling, land titling, and financial, technical and knowledge services
  • certification: technical and financial support for audits and maintenance of certification
  • purchase of RSPO independent smallholder credits.

Since 2014, Unilever has consistently been one of the largest buyers of independent smallholder RSPO credits. We are actively investing in growing the number of certified farmers, farmer groups and the volume of certified oil palm fruit in the global market. In 2019, we purchased 40,000 tonnes of RSPO independent smallholder credits from 30 smallholder groups – representing at least 6,900 independent smallholder farmers across Indonesia, Malaysia and Thailand.

Investing in the &Green Fund

In 2017 we committed to contribute up to $25 million to the &Green Fund (target size $400 million) for investments in projects that remediate or avoid the need for deforestation. The &Green Fund aims to protect 5 million hectares of forests and peatlands by 2020.

See Partnerships for transformational change.

We aim to support farmers by sourcing or buying RSPO certificates directly from independent smallholders, and by working with NGO partners to help and incentivise smallholders to adopt sustainable management and agricultural practices.


Palm oil worker

Working with independent mills & independent smallholders

In 2017, we launched a programme in collaboration with the independent mill, PT SKIP. The project is a partnership with Daemeter, World Education International and the independent palm smallholders surrounding the mill. It involved motivated farmers and their families from 13 villages in Indragiri Hulu and Indragiri Hilir districts in Riau province, Indonesia.

By the end of the project, 4,000 smallholder farms had been mapped, 1,864 farmers had attended Farmer Field Schools and 26 Farmer Facilitators were trained and employed. As a result of the project, farmer alumni have chosen to set up an Association called Karya Serumpun, to independently continue project activities within their community.

This project contributed to local communities and livelihoods through teaching Good Agriculture Practices and NDPE awareness. Equally important was the establishment of local trainers inspired to promote high-yield, low-impact oil palm farming as an attractive profession.

The community has noticed a significant improvement in knowledge and practice for both farmers who participated in the Farmer Field Schools, and their non-participating neighbours.

  • 95% reported overall improvements to garden productivity
  • 93% reported marked improvements to plant growth
  • 87% reported improvements to fruit quality (ripeness, fullness and colour)
  • 85% reported improvements to fruit yields

This work contributes to the following UN Sustainable Development Goals

  • Life on Land)
  • Partnership For The Goals)

In Indonesia, we’re looking at a jurisdictional approach.


Palm oil

A jurisdictional approach – a first for Kalimantan’s smallholder farmers

In Central Kalimantan, Indonesia, we are testing a jurisdictional approach with independent smallholder farmers − addressing a geographical area and working with communities of smallholders and local government to increase yields and prevent deforestation.

We’re working with Yayasan Penelitian Inovasi Bumi (INOBU), a leading non-profit research institute based in Indonesia, and a number of other partners in the district of Kotawaringin Barat and Seruyan, mapping independent smallholdings and training farmers according to the Roundtable on Sustainable Palm Oil (RSPO) principles on good agricultural and management practices.

In 2017, the first 190 independent smallholder farmers in Kalimantan became RSPO and ISPO certified. By end of 2019, over 1,000 farmers were certified.

In the next phase of our partnership, from 2019–2021, INOBU will certify an additional 2,500 farmers on more than 5,000 hectares, with Unilever’s support.

As Roni, a palm oil farmer explains: "I’m 64 and married with three children. I became an oil palm smallholder in 2009 as it provided a higher income for me to support my family. Being part of the Unilever-INOBU programme has helped me improve my knowledge – in areas such as fertiliser use – to increase the amount and quality of my crops, while cultivating them in a more sustainable way. I’m very proud to say that, with the additional income I now earn, I was recently able to send my youngest son to university."

This work contributes to the following UN Sustainable Development Goals

  • Life on Land)
  • Partnership For The Goals)

In Sumatra, we’re looking at how to improve people’s livelihoods with Conservation International.


Farmers gathering

Improving smallholder livelihoods in Unilever’s Sumatran supply chain

In 2019, we partnered with Conservation International to support the Coalition for Sustainable Livelihoods (CSL), a multi-stakeholder group working collectively to advance sustainable palm oil production and support the livelihoods of smallholders in Unilever’s supply chain in North Sumatra.

With funding from Unilever, Conservation International is promoting action at the landscape level, supporting local government in the Tapanuli Selatan regency in North Sumatra and helping it strengthen forest governance and map out a potential restoration area.

Smallholders are being empowered through:

  • Farmer mapping: detailed baseline maps of farmer lands, overlaid with forest and conservation areas, indicating encroachment, go and no-go areas, and HCV/HCS areas.
  • Farmer training: 1,000 smallholder farmers in PTPN III supply chain trained on GAP and RSPO smallholder certificate.
  • Capacity building: 12 farmer groups and two cooperatives established and trained, and 50 extensionists trained.
  • Certification: 700 farmers (12 groups and two cooperatives) certified by RSPO Principles and Criteria and certification process.

This work contributes to the following UN Sustainable Development Goals

  • Life on Land)
  • Partnership For The Goals)