Public and private sustainability standards in the oil palm sector: Compliance barriers facing Indonesia's independent oil palm smallholders

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Key messages

  • Many independent oil palm smallholders threaten to become alienated from formal markets because they lack the technical capacity and/or resources to comply with public and private sustainability standards.
  • Since resolving compliance barriers will require targeted interventions, it is becoming increasingly important to better understand the types of barriers faced by different types of smallholders.
  • This brief presents preliminary findings of research on sustainability, legality and productivity challenges arising from independent smallholder oil palm expansion in Riau, Central Kalimantan and West Kalimantan.
  • Research demonstrates how frontier expansion is often driven by larger out-of-province and absentee farmers that engage in oil palm for investment purposes rather than by smaller farmers (e.g. less than 3 ha) dependent primarily on household labor.
  • Findings show how smallholder legality issues - faced especially by smallholders whose oil palm operations more closely resemble that of businesses - constitute the most significant compliance challenge.


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