IOI Loders Croklaan has partnered with Kerry Group, Wild Asia and the Fortuna Palm Oil Mill in Sabah to implement a three-year Small-Growers Support Program. This program supports the inclusion of smallholders into IOI’s supply chain and will boost small farmer’s (farm size 0 to 500 ha) productivity by helping them implement sustainable agricultural practices. It also guides IOI’s directly sourced third party supplying mills in achieving staged compliance to IOI’s Sustainable Palm Policy and helps them prepare for certification requirements. Wild Asia is the implementation partner for the program that will be managed by both Kerry Group and IOI Loders Croklaan.

Ben Vreeburg, Sustainability Director at IOI Loders Croklaan, explains: “We have a few potential participating non-RSPO certified mills in the Telupid, Beluran and Kinabatangan landscape in Sabah with approximately 5000 smallholders and small growers. We start with one mill – Fortuna – and will increase the number throughout the duration of the program. Smallholders will see a decrease in FFB (Fresh Fruit Bunch) production costs in the first year and a gradual increase in FFB yield in the second year. Through this program millers are ensured of a steady supply and better control of FFB and a higher extraction rate.”

40 % of the total worldwide palm oil production is ultimately provided by smallholders. They play a critical role in the palm oil supply chain. “If you look at the palm oil yield, there are still large variances between the yield of smallholders and big plantation companies,” says Ben Vreeburg. “You could increase FFB production up to 50 % without any new developments if you increase the current yield of smallholders. Helping smallholders to get good sustainable manufacturing practices in place will increase their productivity and further lift them out of poverty.”