Traceable and Sustainable Palm Oil Supply Chain

The Traceable and Sustainable Palm Oil Supply Chain (TRACTION) project builds on the success of its Phase 1 collaboration between SNV and L’Oreal (2018-2022). Continuing in Muaro Jambi District, Jambi Province, Indonesia, Phase 2 will run from 2023 to 2028. This phase focuses on empowering smallholder farmers by enhancing their organisational capacity, developing robust traceability systems, and guiding them towards sustainable agricultural practices.

The TRACTION project is located near Berbak National Park in Muaro Jambi District, Jambi Province, an area where agricultural practices are increasingly threatening the integrity of the surrounding forests. The park has expanded over time, reaching the nearby Sembilang National Park in South Sumatera. In this region, large-scale, intensive palm oil cultivation is a significant driver of deforestation and peatland degradation, contributing to environmental degradation across Indonesia.

To address these challenges, it’s essential to empower smallholder farmers, as they are a key source of palm oil production in the area. By strengthening their capacity and promoting sustainable practices, we can help ensure that palm oil cultivation prioritises soil health and biodiversity.

Strengthening farmer-based organisation

Through institutional strengthening, we aim to increase operational efficiency through pooling resources and funds, improve negotiation skills, and reduce production cost while increasing positive revenue.

RSPO certification technical assistance

SNV has developed a training manual for delivering the Internal Control System (ICS) training. The modules support the certification process as they support the establishment of the institute that will oversee quality and standard compliance for the group. The training module also focuses on how to set up an ICS and its organisational structure.

Training on best management practice regenerative agriculture

One key aspect of BMP training is the emphasis on regenerative agriculture practices, a farming system that focuses on regenerating and rebuilding soil health rather than simply maximising crop yields. In collaboration with CIRAD, SNV will develop a BMP Reg-Ag curriculum that will be tailored to the specific requirements of the farmer’ characteristics and needs.

Improving access to affordable organic compost

A small-scale composting unit on a palm oil plantation can be a valuable resource to provide natural fertiliser for the plantation’s soil that can be set up using simple, low-cost technology and managed by cooperative staff with minimal training. In addition to the environmental benefits, the composting unit can also provide economic benefits by reducing the need for costly synthetic fertilisers.

Improving traceability to plantation

We will develop a logbook and database system for each trained farmer during the training. This information will be beneficial to supporting LOréal in developing a traceability system in the supply chain.

Improving access to financial institutions and alternative income during replanting

We will conduct a credit risk assessment for 1,000 farmers to determine their eligibility for financial assistance. Then, we will train the selected farmers in alternative income generation activities, including equip the female smallholders with financial literacy training to support the household in managing income and expenses in the critical replanting period. Finally, we will connect the selected farmers with local financial institutions to help them access the credit and financial services they need for replanting.