Cargill Grows Base Of Certified Sustainable Independent Oil Palm Smallholders In Malaysia

KUALA LUMPUR – Cargill, in partnership with Wild Asia, has helped 141 independent oil palm smallholder farmers in Perak receive the Roundtable on Sustainable Palm Oil (RSPO) certification under the Wild Asia Group Scheme (WAGS). Fifty of these farmers are from indigenous communities in Perak. This brings the total number of RSPO-certified independent smallholders under the WAGS to 175.

The planted land area for oil palm occupied by the 175 RSPO-certified farmers is 650 hectares. The group collectively produces more than 21,000 metric tons (MT) of certified Fresh Fruit Bunch (FFB) which yields close to 4,000 MT of crude palm oil, a three-fold increase from 2015.

WAGS is a program initiated in 2013 by Cargill, in collaboration with Solidaridad (until December 2015) to promote the production of certified sustainable palm oil (CSPO) in Malaysia, the second largest producer of palm oil in the world. It involves a full set of independent entities across the supply chain from independent oil palm smallholders, to FFB dealers, the mills and refiners. The program provides smallholders and dealers with technical assistance, better access to technology and the necessary expertise to help them adopt responsible and efficient farming practices to improve their crop yields and obtain the RSPO certification.

Mr. Khoo Woon Swee, an RSPO-certified independent smallholder under WAGS shared his experience on how he reduced his costs thanks to better farming practices: “After joining the Wild Asia Group Scheme, I’ve reduced the chemical application on my farm which has certainly helped me save cost on operations. My oil palm trees look so healthy and I am able to get more fruits. I have also learnt how to apply fertilizer more effectively and how to prevent pests without having to use excess chemicals.”

For FFB dealer Mr. Teoh Chai Hock, Director, Teik Joo Chan, the profile of his company has improved thanks to the program, “Our dealership’s reputation has been raised, compared to other dealers, as we have moved to a different level in improving the quality of our FFB suppliers. The technical program provided has helped smallholders to improve the quality of fruits. With this improved quality, we as the dealer have better fruits to sell to the mill. We also enjoy the benefits of direct priority access to the mill offered for being a sustainable supplier.”

Independent smallholders are pivotal to the palm oil industry in Malaysia accounting for 16 per cent of the country’s total oil palm planted area in 2016. With RSPO certification, the smallholder farmers can contribute positively to the rural economy and their communities through responsible farming practices, better crop yields and access to the global CSPO supply chain.

“The certification underscores our commitment to support the inclusion of independent oil palm smallholders to build a transparent, traceable and sustainable palm oil supply chain from Malaysia. Our plan is to further develop a critical mass of smallholders and create a long-term self-sustaining group scheme which is able to provide an uninterrupted growing supply of RSPO certified sustainable palm oil to meet the growing demand globally,” said Chai Wei Joo, managing director of Cargill Palm Products in Malaysia.

Dr. Reza Azmi, Director and Founder, Wild Asia said: “We are heartened that Cargill has continued to support this program and has realized that important relationships have been forged through this process, which can only lead to better support for smaller producers. This conviction has been steadfast given the relatively small numbers of producers in the program. We are confident this program will help refine the “right” approach and will be a guiding insight for how Cargill works with its suppliers – both big and small.”

The WAGS initiative reflects Cargill’s strong commitment to help improve smallholder livelihoods by adopting sustainable practices and having greater access to markets. The program also reinforces our pledge to advance a responsible and fully traceable global palm oil supply chain. In Indonesia, our programs have, so far, helped 45 independent oil palm farmers become RSPO certified.