Jambi, 23 August 2023 – European Union (EU) regulations regarding products free from deforestation and forest degradation, known as the European Union Deforestation Regulation (EUDRR), have significantly impacted oil palm smallholders in Jambi Province. This policy regulates seven primary commodities, including palm oil, cocoa, coffee, rubber, wood, soybeans, and cattle and their derivative products.
With the entry into force of this regulation in all EU member states on 16 May 2023, oil palm smallholders in Jambi Province are feeling renewed pressure to ensure that their crops meet the deforestation-free and legality requirements set out in the regulation.
Operators and traders wishing to sell their products to the European Union must ensure that the products are produced without deforestation after 31 December 2020 and comply with all applicable laws in the country of production.
Indonesia has extensive oil palm plantations, with palm oil production reaching 45.5 million metric tons annually. Jambi Province alone has around 1.1 million hectares of oil palm plantations. The head of the Jambi Provincial Plantation Service, Agusrizal, stated that farmers must follow market demands, including the EUDRR rules, and ensure that their products do not violate regulations, are not deforested, and are legal.
However, the fate of Jambi’s oil palm smallholders takes work. Agusrizal said land ownership issues and partnerships between smallholders and companies often must be solved. “Many smallholders are still experiencing land conflicts and transparency issues in terms of production costs and final price,” he said at the Multistakeholder Meeting Towards Competitive Sustainable Palm Oil in the Global Market, Batanghari Regency, Jambi, which Kaoem Telapak and Setara Foundation organized the meeting.
With EU regulations becoming more demanding regarding sustainability, Stakeholders, such as governments and companies, must support smallholders in fulfilling these requirements.
“Like it or not, follow the market demand. Regarding traceability, we already have ISPO and RSPO similar to EUDR. The regulations also require not violating the rules, deforesting, or destroying forests,” he continued.
Agusrizal explained that in Jambi Province, the local Government formed a task force to keep the palm oil produced following the rules. “We have to prove that every production process is followed by complying with the regulations,” he said with conviction. He emphasized the importance of tracking transmigration and land use after mapping. In this case, all stakeholders must agree to one map that covers all aspects as a guideline.
However, in the context of forest areas, Agusrizal said something firm. “We should avoid producing palm oil in forest areas because of the damage that might arise,” he said. The statement illustrates the commitment to protect forest ecosystems, which are very important for the continuity of nature.
Regarding the price, Agusrizal revealed that the cost of fresh fruit bunches (FFB) is 2,300 rupiah per kilogram, with the age of the oil palm trees being 10-20 years. The price reflects market dynamics that affect the income of smallholders and industry stakeholders. At these prices, the growth of the palm oil industry remains a significant factor in the regional economy.
However, when talking about the impact of the palm oil industry on the environment, Agusrizal warned about an estimate of around 160 thousand hectares of plantations in forest areas. “This is an important estimate to pay attention to, to maintain a balance between production and the environment,” he explained.
Another obstacle that keeps appearing is tenurial conflicts. “The main problem often resolves in partnership issues but is not maintained properly,” explained Agusrizal honestly. He observes that a strong partnership can overcome this problem but requires a shared commitment and transparency in production costs and the plasma owner’s final price. Agusrizal underlined the importance of following regional guidelines to ensure that partnerships comply with applicable regulations.
Amid these challenges, Jambi Province has also shown positive steps in ensuring environmentally friendly and sustainable management of oil palm plantations. This province has been selected as a pilot project for superior oil palm 4.0 research by the Bogor Agricultural Institute (IPB). Subhan, Head of the PSDA Division of BAPPEDA Jambi Province, said Jambi province is one of Indonesia’s leading palm oil producers, with most of the plantations owned by smallholders. Jambi Province Regional Regulation (PERDA) Number 19 of 2019 concerning Plantation Commodity Trade Administration is also a positive step in supporting sustainable plantation management.
Not only facing regulatory changes but also changes in industry culture and mindset. Mardi Minangsari, President of Kaoem Telapak, stated that even though EUDR had an impact on independent oil palm smallholders, it provided an opportunity for better and more sustainable changes in the palm oil industry in Indonesia, including in Jambi Province.
Mardi Minangsari explained, “EUDRR will impact independent oil palm smallholders. However, we don’t need to worry too much. On the contrary, we must see this momentum as a step towards improving Indonesia’s more sustainable palm oil commodity.”
EUDRR encourages taking positive steps towards more environmentally friendly agricultural practices. This step is even more critical in a world increasingly conscious of sustainability. Mardi Minangsari sees EUDRR as a call to improve product quality and farming practices.
Apart from that, Mardi Minangsari also highlighted the issue of land ownership, which has become an annual problem. In his view, having clear and assured land tenure is a necessary foundation for building a stable and sustainable palm oil industry in Jambi. She stated, “Assurance of land tenure is the key to building a solid foundation for the growth of our industry.”
In efforts to create a sustainable palm oil industry in Jambi Province, Setara Foundation Director Nurbaya Zulhakim provides valuable insights on the crucial role of Government and companies in encouraging better practices.
“Free STBD services for independent smallholders,” emphasized Nurbaya Zulhakim. She confirmed that more than 2,000 independent smallholders had received RSPO certificates in Jambi, an essential step towards providing more explicit land tenure assurance. This step aligns with the vision to create a solid foundation for sustainable industrial growth.
In addition, Nurbaya Zulhakim also highlighted the existence of independent smallholders who have obtained RSPO (Roundtable on Sustainable Palm Oil) and ISPO (Indonesian Sustainable Palm Oil) certifications. The submission shows the smallholders’ commitment to environmentally friendly and sustainable farming practices. “This step shows significant progress in creating a better palm oil industry,” she said.
In the context of support, Nurbaya Zulhakim highlighted the vital role of the Government and companies. “We see their role as a leader in shaping the direction of the palm oil industry,” she said. Governments and companies can support sustainability initiatives in close collaboration, including improving the quality of farming practices and certification efforts.
Nurbaya Zulhakim hopes that solid collaboration between the Government, companies and smallholders can create significant changes in the palm oil industry. With concrete steps and real commitments, Jambi Province can lead towards better agricultural practices, contributing to environmental sustainability and the regional economy.