CSVN and P&G Collaboration Extends to Small Growers for Oil Palm Sustainability Initiative

23 Mar 17

The Center for Sustainable Value Networks (CSVN) at MISI will extend the ongoing work with P&G to trace and map the Palm Kernel Oil (PKO) Supply Chain from the downstream Oleo-Chemical Manufacturers to the Independent Small Holder Farmer (ISHF) through the dealers to Small Growers. This work builds on the revelation that while the dealers, who are an important stakeholder and middle-men in the network acting as a black box, source only one-third of their FFB supply from ISHFs, the remaining contributions come from Small Growers (SGs) and Estates.

The new phase of the project focuses on measuring the impact of small grower contribution to the PKO supply chain. The small land holding size of the ISHF’s which is as low as two and a half hectares on an average and a low annual average yield of eight to twelve metric tons of FFB per hectare makes their contribution depend upon a disproportionately large population size of thirty to forty thousand ISHFs. This poses an enormous challenge to provide transparency into the PKO supply chain. Any upstream intervention for sustainability with ISHFs in scope becomes a colossal task in terms of scale.

Reaching out to the small growers and estates by targeting relevant dealer networks should allow a larger portion of the input supply to be certified easily and quickly. This new phase of the project is built upon the presumption that with a minimum land size of more than 50 Ha (and a maximum of 500 Ha) and an estimated average yield of 16 MT/ Ha/Yr reaching out to the SGs and Estates for any sustainable intervention is a much valuable proposition in terms of effectiveness to achieve sustainability and realizable in terms of scale.