Jakarta – A new study led by the University of Hawaiʻi at Mānoa (UH Mānoa) has found that independent palm oil farmers in Indonesia are being sidelined from the sustainable palm oil market, raising concerns over equity and access in the USD 72 billion global industry, the university said in a release on September 11.
Published in Communications Earth & Environment, the study reveals that mills certified by the Roundtable on Sustainable Palm Oil (RSPO) source only 7% of their fruits from independent smallholders, despite these farmers producing an estimated 34% of total palm oil fruit in Indonesia. Instead, certified mills lean more heavily on contract smallholders with formal agreements.
“Passive exclusion is silent but powerful,” said lead author Andini Ekaputri, who conducted the research as part of her PhD at UH Mānoa. “Many farmers never have the opportunity to participate at certified mill markets, and they miss out on potential benefits like price transparency.”
A widening gap
Indonesia, the world’s largest producer of palm oil, relies on millions of smallholder farmers, many of whom operate without formal contracts or legal land titles. The study’s findings highlight how the structure of certification schemes and upcoming regulations risk deepening inequalities.
Environmental scientist David Gaveau, founder of The TreeMap, in a social media post said the EU Deforestation Regulation (EUDR) could further marginalise these producers:
“The EUDR requires palm oil imports to be deforestation-free, legal, and fully traceable from plantation to mill. Many smallholders already meet the deforestation criterion, but legality and traceability rules risk excluding them. Unlike RSPO, which allows uncertified palm oil from independents via mass balance sourcing, the EUDR bans this because it requires full traceability. In practice, the big palm-oil traders are already shifting to stricter supply chain models for Europe that exclude non-certified independents. We hear from the field, this is already happening.”
Gaveau warned that without new approaches, the regulation risks “reinforcing inequities: rewarding industrial actors while marginalising the small farmers who grow much of the world’s palm oil.”
The authors of the study urge RSPO, major palm oil traders, and policymakers to adopt mechanisms that actively include independent smallholders who are deforestation- and fire-free. They recommend collaborative action from governments and the private sector to address barriers such as land legality and to ensure that the transition to sustainable palm oil is both fair and inclusive. (nsh)
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