Cargill Smallholders Receive IDR 500 million in RSPO-Certified Oil Palm Premiums

Jakarta, 29 October 2019 – A total of 3,019 smallholders at Cargill’s PT Poliplant Sejahtera’s (PSA) oil palm plantations in Ketapang Regency, West Kalimantan, recently received IDR 500 million as premiums for selling Roundtable for Sustainable Palm Oil-(RSPO) certified products. This marks the first handout of premium payments since the smallholders obtained their RSPO certification a year ago.

This group of smallholders consist of members from eight village cooperatives (KUD), that manage 6,231 hectares of community-owned land in Cargill's plantation areas.

Anthony Yeow, president director of Cargill-Poliplant Group, which is PT PSA’s parent company, said, "We are delighted to be able to hand over these premiums to our smallholder partners. By supporting smallholders to improve their farming practices, they have been able to improve productivity and produce crude palm oil that fully comply with the RSPO’s stringent standards and to tap on a significantly larger market that is the global palm oil supply chain”.

Said Suherman, Head of the KUD Subur Makmur, one of eight cooperatives who received RSPO premiums from PT PSA, “We are thankful for this achievement. Our partnership with Cargill has enabled us to adopt sustainable agricultural practices. Our yields have increased along with our ability to operate more efficiently”.

As part of its commitment to help smallholders thrive, Cargill will continue its ongoing efforts to help them improve their agriculture practice and start adopting sustainable agriculture practice which will also help them achieve RSPO certification. To date, Cargill has helped more than 16,500 of its 21,600 smallholders become RSPO-certified, both in West Kalimantan as well as in South Sumatra where Karya Makmur Cooperative was amongst the world’s first smallholder groups to be certified by the RSPO through the support of Cargill. 

The success story of Karya Makmur Cooperative which consist of 8,800 members, is another good example of how smallholder’s cooperative improves their agriculture practice and eventually improve their lives by partnering with Cargill. The key to this is the adoption and consistent use of sustainable practices in oil palm cultivation, due to these the cooperative’s members have been able to achieve yields of 3 to 4 tons/hectare compared to independent smallholders who average 2 tons/hectare. Just as important, cooperative members benefit from higher prices of their fresh fruit bunches which can be as much as 30% - 40% more than independent smallholders. The average income of cooperative members has also reached IDR 110 million per year.

All of this means that the cooperatives are thriving, and its members are enjoying significantly improved income levels and standards of living. The Subur Makmur and Karya Makmur and Barokah Jaya village cooperatives are just two of 20 cooperatives in total across South Sumatra and West Kalimantan that have partnered with Cargill.

Watch the video to see the story of Karya Makmur Cooperative’s smallholder farmers who have benefitted from sustainable agriculture practices: https://www.youtube.com/watch?v=2oDlVsI4lxw&feature=youtu.be