Kuala Lumpur: Malaysia’s oil palm smallholders have the opportunity to generate higher incomes by increasing exports of their products through the Malaysian Sustainable Palm Oil (MSPO) and Roundtable on Sustainable Palm Oil (RSPO) certification programmes.
Both certifications enable small planters to sell higher-quality palm oil products while also practising sustainable planting methods that have a positive impact on the environment.
Since 2020, it has been mandatory for all Malaysian-produced palm oil products to receive the MSPO certification, which is the national sustainable palm oil standard.
The RSPO, established in 2004, is an international certification used by the palm oil industry to promote sustainable growth and production practices but compliance with this standard is voluntary.
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(Malaysia has about 250,000 registered smallholders and another 215,000 independent smallholders, according to the Malaysian Palm Oil Board [MPOB].)
“While big and mid-cap plantation companies have adopted RSPO standards, challenges still persist when it comes to onboarding smallholders due to structural issues such as costs, skill and legal requirements which remain a barrier to meeting certification standards,” he told Bernama in an email interview recently.
He said currently 23 grower companies and just six smallholder groups across Malaysia are RSPO certified.
“Our efforts and transformation drive must continue as change and improvement are a necessity for all of us. While sustainability is a shared responsibility, it requires individual change – if we are to cross the finish line together and make an impact, we are duty-bound to take on a greater level of ownership and accept that there is always room for improvement.
“Which is why we will be building stronger partnerships with national schemes, producers, smallholders, processors and buyers to increase the demand for sustainable palm products,” he said.
D’Cruz added that MSPO certification has proven to be beneficial for oil palm smallholders as it has “laid the bedrock for farmers to adopt higher universal standards like RSPO”.
“RSPO certification allows smallholders to earn additional revenue through RSPO credit sales, contribute to sustainable palm oil production and align with global sustainability standards.
“These benefits not only support the economic well-being of smallholders but also contribute to environmental conservation and the social welfare of local communities,” he said.
Oil palm smallholders operate small-scale plantations with planted areas of less than 50 ha. Under the RSPO certification, smallholders can grow oil palm independently as part of an independent smallholder group or as part of a smallholder scheme.
Smallholder Abd Rahman Mohd Noor, 69, who has been operating a 30-ha oil palm smallholding in Lahad Datu, for the last 30 years, said he embarked on sustainable planting practices after receiving the MSPO certification last year through the group certification process with the help of Sawit Kinabalu Sdn Bhd, one of Sabah’s biggest palm oil companies.
He said he started supplying his palm oil products to Sawit Kinabalu as soon as he secured the MSPO certification.
The RSPO standard is a relatively new thing for many smallholders like him, he said, adding that he is ready to apply for the certification through a group if given the opportunity to market his products to the global market.
Abd Rahman said when he first started cultivating oil palm in 1989, he had no experience whatsoever and no one to guide him as well.
“I faced many challenges then… I could only think of sustainable planting methods 10 years after I opened my smallholding. Nazlan Mohamad (left), Abd Rahman (right)
“Today I’m getting good yields… thanks to the MSPO certification which I and other smallholders received through the group certification process with the help of Sawit Kinabalu,” he said, adding if given incentives, they are ready to comply with all the necessary standards to meet the requirements for the RSPO certification.
The cost of getting the RSPO certification for smallholder groups ranges from RM25,000 to RM40,000 per group, including membership and auditing fees. The cost also varies depending on the group size.
Sawit Kinabalu Group Sustainability General Manager Nazlan Mohamad said besides helping smallholders to obtain MSPO and RSPO certifications, the company also buys fresh fruit bunches from them for processing purposes.
“They are paid premium incentives for their supplies if they possess RSPO certification,” he said, adding that many smallholders with only MSPO certification have expressed their wish to upgrade to the RSPO standard.
“Our company is endeavouring to support them to pursue the RSPO certification by this year.”
According to MPOB, Sabah’s total oil palm planted area stood at 1,508,060 ha as of December 2022. As of June 2023, 95.6 percent or 1.44 million ha were MSPO certified (source: Malaysian Palm Oil Certification Council or MPOCC) and at least 26 percent or 425,882 ha were RSPO certified (source: RSPO).
Sabah hopes to achieve its 100 percent RSPO-certified goal for its oil palm plantations by 2025.
WWF-Malaysia Sustainable Agriculture senior manager Max Donysius said attaining the MSPO certification is an essential step toward the RSPO certification which most large companies have the resources to get.
“However, compared to big corporations, many mid-sized palm oil growers and smallholders face difficulties (in endeavouring to) comply with RSPO standards due to the cost involved to achieve full certification,” he said.
In view of this, WWF-Malaysia has set up a dedicated sustainable palm oil team (SPOT) to provide technical support to growers located in Sabah to form growers groups and subsequently guide them to undergo the group certification process to obtain MSPO and RSPO certifications.
“SPOT aims to support and assist 15,000 ha or 450,150 mid-sized growers and smallholders in the Tabin landscape to be RSPO-certified,” he told the media recently.
Donysius, who is also a SPOT team lead, said with the RSPO certification, smallholders are allowed to receive an immediate 40 per cent premium through selling RSPO credit before being fully accredited, and subsequently to a full premium price for their products upon completing all its milestones.
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