17 October 2024, Jakarta— Musim Mas Group, the Livelihoods Fund for Family Farming (L3F), SNV Indonesia, and World Agroforestry (ICRAF) are collaborating to improve the knowledge and capacity of independent oil palm smallholders through the Biodiverse & Inclusive Palm Oil Supply Chain (BIPOSC) project.
The project began in 2021 and takes a long-term approach to sustain a deforestation-free supply chain, regenerate degraded land, restore local biodiversity, and improve the livelihoods of independent smallholder farmers in Labuhanbatu, North Sumatra. BIPOSC will achieve this through implementing regenerative agriculture, locally adapted agroforestry models, capacity-building for sustainable businesses, and others.
The independent palm smallholders taking part previously received complementary training from Musim Mas. Following the training, these smallholders formed a smallholder’s association, Labuhanbatu Independent Oil Palm Smallholders Association (APSKS LB), North Sumatra. Musim Mas encourages smallholders it trains to form associations to gain better access to resources and obtain certification by the Roundtable on Sustainable Palm Oil (RSPO) and Indonesian Sustainable Palm Oil (ISPO).
“Musim Mas has long saw that smallholders are key to achieving palm oil sustainability, and that’s why we lead Indonesia’s most extensive smallholder project. We believe that the way forward is to collaborate with more partners to achieve a wider impact. With our partners in the BIPOSC project, we hope to advance the skills and know-how of smallholders through regenerative agriculture and related techniques. Regenerative agriculture and agroforestry have the potential to help smallholders be part of a sustainable palm oil supply chain. It could help them develop alternative sources of income, especially during the replanting period where their palm oil crops are unproductive, typically for three years,” said Rob Nicholls, General Manager, Projects & Programs, Musim Mas Group.
In the face of climate change and threatened biodiversity, regenerative agriculture can play a role for small farms because it maintains soil health, prevents erosion and water runoff, and can potentially reduce greenhouse gas emissions and nitrogen leakage.
“As a global development partner organization, SNV aims to support Indonesia in achieving its Sustainable Development Goals (SDGs). To achieve this, we need to implement effective and impactful programs to transform agricultural and food systems, energy, and water. In the BIPOSC project, we promote a comprehensive regenerative agriculture and agroforestry model to maintain soil fertility and biodiversity, providing maximum benefits for farmers’ livelihoods and economy,” said Rizki Pandu Permana, Country Director of SNV Indonesia.
The key regenerative agriculture techniques taught include the application of bio-input, mulching to protect topsoil, planting cover crops, integrated pest management that reduces the need for chemical pesticides, and application of compost that reduces the amount of chemical fertilizers needed. To date, 1,032 independent smallholders have received training and have implemented these techniques on their farms, representing a total land with a total area of 1,063.68 hectares. The project has trained 25 village facilitators to provide hands-on assistance to smallholders, and seven demo plots have been established as pilot areas and learning facilities for regenerative agriculture.
“When I visited palm oil smallholders a few years ago in the area, their biggest concern was access to more fertilizers. While fertilizers play a key role in boosting yields, there was a noticeable gap in understanding how to protect the soil from long-term degradation. Smallholders needed more knowledge about maintaining soil health, preserving soil structure, and other critical factors. This is exactly what the BIPOSC project aimed to address, and we’re pleased to see that the farmers involved are now reporting not only higher yields but also healthier soils on their plots,” said Bernard Giraud, President & Co-Founder, Livelihoods.
The project also looks into capacity-building. In addition to home composting, the project enabled the local farmer association, APSKS LB, to develop and manage a composting unit with a capacity of 100-150 tons/month. Producing compost at scale with inputs from nearby mills and farmer plots, the unit offers compost to member farmers at half of typical market prices. In its first year of operation in 2023, the unit produced 588 tons of compost, and generated a profit of IDR 421 million. The project partners believe it is a model that can be replicated elsewhere.
“One of the most impactful outcomes of this program for smallholders is the Composting Unit as the business model around it. It enables smallholders to obtain compost affordably, and the profits are shared among member farmers. This is a practical solution to promote the adoption of composting, and all ASPKS-LB smallholders are now using compost in their plots,” said Syahrianto, Chairman of the Labuanbatu Independent Oil Palm Smallholders Association.
As of 2023, independent smallholders manage about 41% of oil palm planted areas in Indonesia, representing 6.94 million hectares. This figure is expected to increase to 60% by 2030, making programs like BIPOSC critical in shaping the future of sustainable palm oil production.
About Musim Mas
Musim Mas Group is an integrated palm oil company globally, operating in 13 countries. From plantations, mills, refineries, kernel-crushing plants, oleochemicals, and specialty fats plants, Musim Mas manufactures palm oil products and value-added derivatives. Musim Mas is one of the largest palm oil producers in the world. The Group develops innovative value-added solutions for its customers, supported by Research and Development (R&D) centers in Singapore and Indonesia. Inter-Continental Oils and Fats (ICOF), a member of Musim Mas Group, undertakes global marketing activities.
The Group is committed to sustainability and was the first company with significant operations in Indonesia to join the Roundtable on Sustainable Palm Oil (RSPO) in 2004. Committed early to emissions reductions, Musim Mas is a signatory to the Agriculture Sector Roadmap to 1.5 Degrees convened by the Tropical Forest Alliance. The roadmap aims to halt commodity-linked deforestation in line with the 1.5-degree pathway while enhancing the livelihoods of smallholder farmers and supporting the sector’s transformation toward forest-positive land-use management. In January 2024, Musim Mas announced that it will strive to achieve net zero by 2050, aligning with climate science as per the Science Based Targets Initiative (SBTi). Musim Mas also manages the most extensive independent smallholder programs in Indonesia.
About Livelihoods Funds & Livelihoods Fund for Family Farming
The Livelihoods Funds bring together a coalition of private & public actors committed to restore degraded natural ecosystems, build sustainable supply chains, and improve the livelihoods of millions of rural communities.
Created in 2015, the Livelihoods Fund for Family Farming (L3F) is an innovative investment vehicle of the Livelihoods Funds co-founded by Mars Incorporated and Danone, later joined by Firmenich and Veolia. The fund pursues a dual mission: help committed brands move to sustainable sourcing models while improving the livelihoods of smallholders. With an investment target of 85 million euros over 10 years, L3F provides timely support for the adoption of regenerative agriculture practices, the empowerment of a new generation of farmers and the restoration of natural resources.
L3F has previously built strategic coalitions in the coconut, vanilla, and shea value chains in the Philippines, in Madagascar and Ghana. This time, L3F has leveraged its expertise in agroecology and sustainable sourcing to co-design this new palm project activities which rely on regenerative agriculture and agroforestry. It has brought together a coalition of actors committed at every step of the value chain to achieve the transition.
About SNV
SNV is a not-for-profit international development organization that makes a lasting difference in the lives of people living in poverty by helping them raise incomes and access basic services. SNV is based in the Netherlands and has been working in Indonesia since 2013 across three main sectors – agriculture, water sanitation and hygiene (WASH), and energy. Climate change and gender are cross-cutting issues underlying all interventions.
SNV engages with various stakeholders – including supply chain actors, private companies, local NGOs, research institutions, and government agencies – to enhance the livelihoods of smallholders, increase environmentally friendly business benefits and improve sanitation and hygiene for thousands of people in Indonesia.
SNV’s intervention in the palm oil sector focused on guiding the sustainable practice of oil palm production across the country using the deforestation-free supply chain approach. SNV provides the capacity building and advisory services for stakeholders in the supply chain on better management practices, responsible sourcing, including supporting independent smallholders in implementing sustainable practices to improve productivity, reduce environmental impacts, and promote market access.
About World Agroforestry (ICRAF)
World Agroforestry (ICRAF) is a centre of scientific and development excellence that harnesses the benefits of trees for people and the environment. Knowledge produced by ICRAF enables governments, development agencies and farmers to utilize the power of trees to make farming and livelihoods more environmentally, socially and economically sustainable at multiple scales. ICRAF is one of the 15 members of the CGIAR, a global research partnership for a food-secure future. We thank all donors who support research in development through their contributions to the CGIAR Fund.
Musim Mas, SNV and APSKS LB share the result of 3 years BIPOSC project on promoting Regenerative Agriculture at a Press Conference in Jakarta, Indonesia on 17 October 2024
Smallholder farmers undergoing training on regenerative agriculture
Smallholder farmers undergoing training on regenerative agriculture
Smallholders applying home-based compost
The Composting Unit Established Under the BIPOSC project
Installing barn owl nests to grow their populations as part of our Integrated Pest Management approach to reduce the use of chemical fertilizers
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