Toward nature-positive trade in Asia’s agriculture supply chains

A smallholder farmer fertilizes the soil in their oil palm plantation. Photo by Icaro Cooke Vieira/CIFOR-ICRAF

Making agricultural production more sustainable is a key challenge of our time – and it requires reckoning with an intricate web of climate, biodiversity, and food system crises.

On 26-27 September 2023, as part of a regional stakeholder consultation on nature-positive trade for sustainable agriculture supply chains and inclusive development in Asia, a panel discussion explored this issue through an in-depth examination of sustainable pathways for the palm oil industry.

During the event, Robert Nasi, the chief operating officer of the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF) and director general of CIFOR, said that sustainability in the production of commodities like palm oil, timber, rubber, coffee, and cocoa must extend to the entire value chain, encompassing transportation and consumption. The emission footprint embedded in trade and transportation, coupled with inequitable pricing, poses significant obstacles to achieving true sustainability.  

Nasi stressed the importance of events like the consultation, where diverse stakeholders, from government representatives to research centres, academic institutions, and NGOs converge to collaboratively address these challenges from production to consumption and strive for a more sustainable and enduring global trade landscape. 

However, “we still have a huge number of perverse incentives working in the trade sector,” he said. “The biggest one is fossil fuel: we are subsidizing fossil fuel at the rate of 12 million [US] dollars per minute – so, since I have started this talk, we have given 60 million dollars to the fossil fuel industry. Unless we change that, it is very unlikely that we’ll end up having anything that is close to sustainability in the matter of trade.”

Proactive steps towards sustainable agriculture

Valerie Julliand, the UN resident coordinator for Indonesia, underscored the pivotal role of Asia as the world’s leading contributor to agricultural and fisheries production, which in 2022 provided livelihoods for 8.6 million individuals across Indonesia, Thailand, Vietnam, and the Philippines. Julliand praised the commitments and actions taken by Asian countries to tackle sustainability challenges, including many of these nations’ signing of a joint road map for cooperation on trade, forest, and agriculture commodities.

Many speakers at the event focused on enhancing market access and financial support for smallholders, with strong emphasis on capacity building as crucial for the agricultural sector. During interactive workshops, participants highlighted the role of facilitators in supporting smallholder farmers towards land certification and sustainable agricultural practices using tailored communication methods. They stressed the need for increased recognition and support for such facilitators.  

One group of participants underscored challenges faced by smallholders, proposing fintech integration and financial literacy programmes. Another group discussed policy solutions for an inclusive trading system, advocating for a bottom-up approach and the establishment of an environmental trust fund. A third group highlighted the importance of traceability in the palm oil supply chain and stressed the need for user-friendly technologies and streamlined policies. Another echoed concerns about the role of the private sector, emphasizing the necessity for simplified and harmonized standards to streamline operations. 

Ground-breaking initiatives  

Herry Purnomo, the interim director of CIFOR-ICRAF Indonesia, shed light on the significance of the Trade, Development and the Environment Hub (TRADE Hub), a global initiative that involves 50 organizations across 15 countries, and in which Indonesian partners play a pivotal role. It works to address the complexities of managing trade in commodities such as palm oil, coffee, soybean, bamboo, rattan, rubber, cocoa, wildlife, and even songbirds.

Purnomo highlighted the indispensable roles of buyers and the government in steering the course toward sustainable palm oil production. “One of the key factors in sustainable palm oil is green consumers,” he said, adding that sustainability isn’t merely an option for the commodity, but an integral part of Indonesia’s constitution.

Ernan Rustiadi, vice rector of research, innovation, and agro-maritime community development at Bogor Agricultural University (IPB) introduced SIPESAT, an information system launched in June 2023 for performance assessment and institutional strengthening of the oil palm supply chain. SIPESAT’s analytical capabilities identifies underperforming segments and simplify transaction data documentation throughout the palm oil supply network. 

Focused on independent smallholders, the initiative serves to enhance the traceability and legality of Indonesian palm oil production. It’s one key step in a larger quest: to continually leverage cutting-edge research and technology towards a more environmentally-friendly and economically-robust future for the country’s agricultural supply chains, said Rustiadi.

For more information, please contact Herry Purnomo: h.purnomo@cifor-icraf.org

Acknowledgements

This event was hosted by the United Nations Environment Programme (UNEP) in partnership with the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF), IPB University, and the Center for Climate and Sustainable Finance University of Indonesia (CCSF UI). The Trade, Development and the Environment Hub is led by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) and funded by the UK Research and Innovation Global Challenges Research Fund (UKRI-GCRF).