Smallholder farmers risk being forgotten in sustainable biofuels race

Photo by Jenny Farmer/CIFOR

BOGOR, Indonesia (16 November, 2011)_Smallholder farmers in developing countries risk being left behind in the push to produce sustainable biofuels, deterred by complex and expensive certification schemes, according to a recent CIFOR study.

With limited scope to meet the high financial, technological and capacity demands of more sustainable practices, the study argues that existing standards and certification schemes are heavily biased towards industrial-scale producers.

“It is imperative for proponents of sustainability standard and certification schemes … to ensure that no farmer is left behind in the quest towards sustainable biofuel production,” said Janice Lee, lead-author of the study No farmer left behind in sustainable biofuel production.

Smallholder farmers make up a significant chunk of overall production, accounting for around 36% of palm oil in Indonesia alone. Despite their strong market presence, many are put off the certification process due to additional expenses for administration, training and third-party inspections, poor access to information and technical support, as well as a reluctance to break away from familiar norms.

In addition, certification requires farmers implement a system of documentation and record-keeping, which can be overwhelming and frustrating for farmers with lower educational backgrounds.

While some of these smallholders are able to overcome sustainability certification hurdles thanks to their links with private companies, more independent farmers have fewer alternatives.

One option is to share the financial burden by joining a community group; however, achieving a fair division of costs can cause conflict, owing to disparities among farmers in terms of wealth and the quality and size of land. Given a lack of obvious rewards, smallholder farmers can feel there is little incentive to pursue sustainable practices.

“Some smallholders find it difficult just to sustain a productive and profitable farm,” said the report. “It might be too arduous a burden for these farmers to take on additional environmental and social responsibilities.”

Nevertheless, the study argued that certification is vital for farmers to access key export markets, including the European Union where products are required to meet standards set by bodies such as the Roundtable on Sustainable Palm Oil and the Round Table for Responsible Soy.

“Sustainable certification is important as it acts as an incentive for the industry to change their production practices as compared to keeping to business as usual,” said Lee.

“For smallholders, it presents not just an opportunity for greening their practices, it also encourages best management practices which can help to increase plantation yields.”

The appeal of certification rests on continued demand for sustainable products. Although this demand is expected to increase in the future, in the short-term, customers and markets are often more concerned with costs than the development of sustainable products.

“As such, the international community and certification boards will need long-term exchange and continuous engagement with these consumers,” Lee said.

More needs to be done to help smallholders, concludes the report. This could include offering short-term rewards, such as premium pricing, or by linking sustainability initiatives to developmental benefits (e.g. microfinance, health and education services) for smallholders in rural areas. In addition, governments should step in and provide financial incentives and improve access to markets by strengthening local infrastructure.

Although Lee has not yet heard of any official schemes which help smallholders with costs and administration, some pilot projects in Ghana, Guatemala and Malaysia have begun to address these certification issues, she said.

“So far most of the schemes geared towards helping small farmers are a product of co-operation between non-governmental organisations such as the Producer Support Initiatives from Solidaridad and private companies who have joint-venture projects with small farmers. More can and should be done by local authorities as well as various actors of the supply chain to involve small farmers in sustainable biofuel production.”