Independent smallholders - Costs and benefits of RSPO certification

A recent study by the SEnSOR Programme quantifies costs and benefits and potential impact on livelihoods of RSPO certification for independent smallholders. It shows they need support from third parties in order to meet RSPO requirements, which is costly. The report synthesises available evidence of monetary costs and benefits of RSPO certification for independent smallholders, by reviewing available literature and using secondary data from a PhD-study and NGOs. The findings give insights on the initial investments needed to certify smallholders, as well as the recurring costs and benefits and the potential impact of RSPO certification on smallholders’ livelihoods (read the short report-summary).

RSPO-definition of independent smallholders: “... while very varied in their situations are characterized by their: freedom to choose how to use their lands, which crops to plant and how to manage them; being self-organized, 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”

Upfront costs of certification for three groups of independent smallholders in Indonesia and Malaysia were 87, 114 and 215 EUR per hectare. For independent smallholders in Indonesia, these costs were estimated to be equivalent to 5% and 14% of mean annual revenue from oil palm. Recurrent costs include costs for surveillance and certification audits and RSPO membership (estimated between 21 and 65 EUR per farmer and year) and costs of changes in farm management (found to increase up to 127 EUR per hectare).

RSPO certification potentially has economic benefits for independent smallholders, such as increased yield, improved market relations and access to inputs, training and finance and price premiums through the sales of GreenPalm certificates. However, there is little conclusive evidence for these benefits, partly due to lack of data. According to the report, improving the uptake of good agricultural practices is the most promising area for increasing the impact of RSPO certification on smallholders’ livelihoods.

Read the full report 

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