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Engaging Smallholders in Deforestation-Free Value Chains

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More than 70% of tropical deforestation is caused by agriculture, driven by production of global commodities such as soy, beef, palm oil, and wood products. Smallholder farmers are important players in these sectors – they produce, for example, 40% of the world’s palm oil. This means deforestation can’t be addressed by solely working with the big players; there is a need to develop new solutions that take into account smallholder farmers’ specific needs.

Traditionally, companies aiming to address sustainability in their supply chains have done so through certification-based approaches. That means training and certifying only those farmers producing the commodities the companies procure. While still important, certification has shown its limits when it comes to smallholder farmers: it comes at a cost, and often fails to be inclusive of all other farmers and actors in a landscape, who also have an impact on the sustainability of the area. This is where IDH’s Production, Protection and Inclusion (PPI) compacts can help, by focusing on sustainability beyond single farm gates, across a whole landscape. PPI compacts bring all stakeholders together (business, local and national government, communities, civil society organizations), for them to agree on the conditions for sustainable production, the localization of the forest to be protected as well as the conditions to its protection.

An example of this approach is the “Smallholder Productivity and Forest Protection” investment proposal that oil palm concession holders, government and IDH developed in Liberia, to invest in community owned oil palm farms that can enhance community livelihoods while protecting forests. The model is based on so-called Production-Protection Agreements (PPA), developed through a truly participatory and inclusive approach that follows the principles of Free, Prior and Informed Consent. Communities will establish and agree upon the land to be planted with community oil palm, as well as the use, management, monitoring and patrolling of the community forest to be protected.

Another example of smallholder engagement is led by the oil palm plantation company Bumitama Agri Ltd., with support from IDH and Aidenvironment in the Ketapang district, West Kalimantan. The villages inside or adjacent to the Bumitama concession areas are composed of diverse ethnic groups, with a majority living on low income. Forest encroachment, fires and illegal logging, partially driven by the low productivity of oil palm on smallholders’ land, have led to the severe degradation of the forest corridor contiguous to Bumitama’s concessions. As part of the IDH landscape program in West Kalimantan and with support from Aidenvironment consultants, Bumitama has initiated a project addressing production and forest protection related issues in this region, including villages and smallholders located near key protection areas. The approach is centred on defining the economic development needs of villages, and developing village level land-use plans that will be integrated into the spatial plans of the District government. Bumitama will provide support to improve smallholder productivity and the livelihoods of non-palm oil community members in alignment with these land-use plans.

These examples from two very different landscapes illustrate the variety of community and smallholder engagement mechanisms, demonstrating that there is no one-size-fits-all approach when engaging with smallholders. They also demonstrate that farmers and communities need to be at the center of the productivity enhancement and forest protection plans, for them to be successful. As IDH develops these models based on the principles of production, protection and inclusion, we will continue sharing the learning along the way so that it can be beneficial to other organizations that aim to address deforestation through innovative landscape approaches.

Learn more about smallholder engagement in deforestation-free value chains at the TFA 2020 General Assembly Knowledge exchange session hosted by The sustainable trade initiative (IDH) on 21 March 2017. This session will provide a platform to share experiences in smallholder engagement, focusing a two key commodities: soy and palm oil. It will be an opportunity to discuss about the range of solutions that could be implemented in various geographies.


Learn more about the Tropical Forest Alliance 2020 at the upcoming TFA 2020 General Assembly held in Brasilia, Brazil 18 – 22 March. See the full programme here.


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