12/11/2012 (Bangkok Post) - Thailand has become the first country to receive smallholder Certification from the roundtable on sustainable palm oil (RSPO), a global non-profit association set up to promote sustainable palm products.

Thailand produced 1.6 million tonnes of palm oil last year, mostly for use in the food sector but also for making
biofuel. WISIT THAMNGERN

The award, granted to Thailand on Nov 2, certifies that Thai oil palm farmers adhere to sustainability standards covering issues such as farm management, fertiliser use and worker safety and health.

"In the past, certificates went mainly to big companies, but obviously we need to cover as many as possible to achieve real sustainability," said Alwi Hafiz, the managing director of BSI Group Asean, the certification body for the project.

"Small-scale farmers are a major part of this industry, particularly in Thailand, where more than 70% of palm oil is produced by small farmers. We should not exclude them."

The RSPO certification system, launched in 2007, has since been widely accepted by the global palm oil industry.

RSPO-certified palm oil production amounts to 7.2 million tonnes a year or 14% of global palm oil production.

Indonesia accounts for 45.5% of the total RSPO-certified palm oil production, with Malaysia accounting for another 44.7%.

Proponents say certification offers mutual benefits for farmers and consumers alike.

Consumer concerns about the environmental impact of palm production has pressured multinationals to consider the sustainability of their supply chains, starting right from the farm.

Farmers in turn say certification also brings benefits in terms of higher yields, more efficient production and more stable price arrangements.

Darrel Webber, the RSPO's secretary-general, said demand for environmentally friendly products from consumers is indeed putting pressure on farmers to comply with sustainability practices.

"As the third-largest producer of crude palm oil in the world, without certification it would be difficult for Thailand to compete in the world market," he said in a statement.

Efforts to certify Thai growers were initiated in 2009 under a programme funded by the German government and the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) together with the Office of Agricultural Economics, an agency under the Thai Agriculture Ministry.

Small farmers from Krabi, Surat Thani, Trat and Sa Kaeo provinces were selected to participate in collaboration with five producers _ Univanich Palm Oil, Southern Palm Oil Industry Co, Suksomboon Palm Oil Co, United Palm Oil Industry and Aoluek Cooperative.

Overall, 412 smallholders received certification in the programme, which ran from January 2009 to June 2012.

A study on the impact of the project showed that yields for participating farmers on average totalled 3,160 kilogrammes a rai compared with only 2,490 kg per rai for non-participating farmers on similar-sized farms.

One farmer said average yields actually doubled as a result of the programme due to better fertiliser management and a rearrangement of how his palm fronds were planted on the farm.

Thailand produced 1.6 million tonnes of palm oil last year, mostly for use in the food sector but also for making biofuel.

The multinational healthcare company Johnson & Johnson signed a purchasing deal with the certified independent smallholders' groups.

Warin Chaikliang, a participating farmer from Krabi, said the contract will help fix prices for his farm.

"Now we can sell our products directly to Johnson & Johnson, which is a very credible buyer, and our partnership is a long-term one rather than a one-time purchase," he said.

"With the contracts, we don't need to rely on middlemen and worry about price fluctuations any more."

Mr Hafiz from the BSI Group Asean said the process for certification is rigorous.

"Compared with the big companies, the certification requirements are slightly different for smallholders," he said.

"For example, big plantations must sign contracts with workers, while for small farms, which usually hire only one or two workers, verbal agreements are accepted. But even though there is a verbal contract, we also conduct strict verification with workers to check that they were fully paid as agreed."

Daniel May, a GIZ executive and the director of the Sustainable Palm Oil Production for Bio-Energy Project, said he hoped the lessons learned from the project could be applied to farmers across Thailand. "We only helped 412 farmers this time, but there are over 100,000 oil palm farmers in Thailand," he said.

"We hope the Thai government will continue this project by providing funds and expertise. ... As we have shown, [this programme] benefits farmers and the national economy of Thailand."

Senniah Appalasamy, a BSI auditor, said certification is reviewed annually, and one challenge faced by small farmers is maintaining records.

"You may have done everything sustainably, but you have to prepare and develop the records as evidence to show the auditors. Otherwise, you will never get certified," he said.

He added that in a number of cases, farmers failed audits several times before finally passing.

While surveillance audits are done every year, each certificate is valid for five years.

Funding is another issue for smallholders to cover the costs of the audits and mandatory training.

Arongnit Chaikliang, a coordinator and adviser with the project, said organising small farmers is a challenge.

"People are used to making individual decisions and acting separately. We had to put a lot of effort into communicating and organising the farmers together," she said.

The GIZ's Mr May added: "When we started this project four years ago, we always heard farmers saying, 'It's too difficult and too complicated. We can't do it.' Changing the mindset and behaviour of people took a lot of time."