However, the Indonesian Palm Oil Farmers Union (SPKS) dismissed the concerns as "exaggerated" and said it welcomed the new EU law, which provides financial and technical support for the sustainable development of smallholder farmers, and promotes a living wage for farmers. better monitoring systems.
A key requirement of the new law is that farmers provide geographic information on where palm oil is returned to the plantation where it was produced. A study by Madani, a non-profit organization called Mongabay, reported last week that small farmers fear they may not be able to comply with EU traceability rules because of the informal ways they use to market palm oil.
According to Ida Greenberry, senior advisor for sustainable development at SPKS, small farmers need more support from corporate social responsibility or large palm oil companies or from governments and donors to meet the law's requirements, including implementing reliable tracking systems.
Indonesia's small farmers deserve such support, he says, because they have historically been exploited, driven off much of their land and desperate for palm oil plantations.
According to a Gecko Project study last year, Indonesian cities are losing millions because many large palm oil producers don't follow rules that require them to share their revenue with local communities.
Greenberry said he hoped the EU rules would ensure the long-term sustainability of farmers' livelihoods, overcome a legacy of publishing to oppose farmers more than business partners, and ensure the fair treatment small farmers deserve.
By developing a zero-deforestation tool and incentive system, SPKS is partnering with a non-profit High Carbon Equity approach to sustainably produce palm oil in Indonesia, and hopes that green fruit companies will receive additional funding.
According to Chain Reaction Research (CRR), which examines the risks of deforestation in supply chains, the cost to palm oil companies of supporting their traceability efforts can be as high as 3.5 percent of revenue.
That cost is small, as non-compliant companies could lose $14.3 billion in face value, CRR concluded.
Now progress is being reversed.
Indonesian palm oil company Musim Mas, which sources 40 percent of its fresh fruit from independent smallholders and teaches sustainable farming techniques to thousands of small farmers, said the deforestation law could wipe out the work it has done over the past decade. Farmers to the ground. . Fuel supply chains.
"Given today's demand, manufacturers are tempted to 'de-risk' their supply chains by limiting or simply eliminating the impact of smallholder farmers," said Carolyn Lim, the company's corporate communications group manager.
If smallholder farmers do not have formal land titles (a common situation in Indonesia) or do not share information about farm boundaries, they can be seen as a risk, Lim said, adding that some farmers may be reluctant to disclose this information. unknown to foreign governments.
"Our industry has grown enough to supply the EU market with palm oil 'filler' products. But while this regulation may prevent deforestation outside the EU, it does nothing to stop deforestation by improving supply chains," said Lim.
He also said the impact of EU legislation on small farmers would not be assessed until 2028/2029.
Conflict resolution
Ruben Brunsveld, head of the Europe, Middle East and Africa Roundtable on Sustainable Palm Oil (RSPO), which is part of the Global Green Palm Oil Standards, said companies should be given enough time to develop conditions that include smallholder farmers. Help follow the rules.
“[Companies] want all parts of the supply chain to be able to communicate information to small farmers in Indonesia, Malaysia and other developing countries.
"This requires companies to invest time, energy and money in the supply chain. They have 18 months to do this. But technically everything is possible. We need to keep small farms in the ecosystem and join the European market."
RSPO members are in a strong position because they now require full monitoring at the mill level. Europe is the largest market for RSPO certified palm oil. Only 20 percent of the world's palm oil trade is certified by the RSPO.
Brunsveld added that "differences on both sides" over the environmental impact of palm oil have led to tensions in Europe and Southeast Asia, which must be resolved for EU rules to be effective.
“There's not enough recognition of the huge progress [the palm oil trade has made in reducing deforestation] in Europe over the last five to ten years. It is clear that Europe wants to impose a market ban on palm oil in Asia.
"We need a constructive dialogue. Malaysia, Indonesia and the European Union Commission should work together to finalize this law," the minister said.
According to the EU, it is responsible for 10% of historical deforestation through the agricultural raw materials it buys. By 2021, the regional group will import $6.4 billion worth of palm oil and palm oil products, 70 percent of which will come from Malaysia and Indonesia.
