Millions of people around the world depend on palm oil for their livelihood. Smallholder farmers produce 40% of the world's palm oil, but suffer from lower yields. The RSPO wants to support more smallholders to get RSPO certified in order to produce more oil using less land, raising level of income among poor farmers and reducing risk of land conversion which threatens forests and biodiversity. Smallholders who are certified to produce sustainable palm oil can benefit from an improved access to markets. The RSPO provides funding to support smallholders in gaining certification and to make this happen.


Definitions of smallholder and out-growers
The definition of out-growers and smallholders was stated in the RSPO Principles &Criteria for Sustainable Palm Oil Production (2007) as:

  • Out-growers: Farmers, where the sale of Fresh Fruit Bunches is exclusively contracted to the grower/miller. Out-growers may be smallholders.
  • Smallholders: “Farmers growing oil palm, sometimes along with subsistence production of other crops, where the family provides the majority of labour and the farm provides the principle source of income, and where the planted area of oil palm is usually below 50 hectares in size”

The RSPO Guidance on Scheme Smallholders (July 2009) further recognized:

  • Independent smallholders “... while very varied in their situations are characterised by their: freedom to choose how to use their lands, which crops to plant and how to manage them; being self-organised, self-managed and self-financed; and by not being contractually bound to any particular mill or any particular association. They may, however, receive support or extension services from government agencies” 
  • Scheme smallholders “...while also very diverse, are characterised as smallholders who are structurally bound by contract, by a credit agreement or by planning to a particular mill. Scheme smallholders are often not free to choose which crop they develop, are supervised in their planting and crop management techniques, and are often organised, supervised or directly managed by the managers of the mill, estate or scheme to which they are structurally linked.”

There is no generic definition on Associated Smallholders as yet. However, a definition can be taken from the Papua New Guinea National Interpretations document, which states that Associated Smallholders“…share some of the characteristics of independent smallholders, notably in terms of land use and management decisions, and yet are closely linked to particular mills for marketing and extension.”

Do you have questions to ask on smallholder issues? 
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