Support legalization of production to promote adoption of sustainable agricultural practices in line with L/JI objectives

Duration of engagment

Long (3+ years)

Cost

($-$$$)

Assessment of legal issues

($-$$$)

Engagement with communities, producers, and government on legal issues

($$-$$$$)

Support to legalization processes

($$-$$$$)

Incentives for legal and sustainable production

In the real world

1

Licensing smallholder farms paves the way for certification

To advance jurisdiction-wide palm oil certification, Unileverteamed up with Earth Innovation Institute, Yayasan Inovasi Bumi, the Central Kalimantan Provincial Government, and the Kotawaringin Barat District Government. This partnership helped a cooperative of smallholder oil palm producers in Pangkalan Tiga village transition to legal and RSPO certified production systems. Through the project, farmers obtain formal land certificates, business licenses, and environmental permits to bring their production into the legal economy. The approach to legalization leverages technology to accelerate land registration, including mobile phone apps and open source geospatial information systems (GIS). The project also provides capital to establish extension services to smallholders to facilitate sustainability certification, offtake agreements for certified products, and other incentives for sustainable production.

2

Guatemala’s milestone in palm oil certification

In a milestone toward achieving RSPO certificationin Guatemala, Cargill, Oleon, and Palmas del Ixcán worked closely with Solidaridad to support smallholder palm oil farmers to legalize their operations. The partners conducted smallholder environmental impact assessments, then submitted these to the Guatemalan government, which issued 91 environmental licenses.

Key points for companies

Determine whether the target landscape/jurisdiction has set a goal around legalizing commodity production. If so, companies should align their efforts with the L/JI’s goals and geographic priorities. Alignment could mean redirecting and/or expanding current legalization support or investing in programs delivered by others. Upstream companies with robust farmer outreach and hands-on training capacities may take on leading roles, while downstream companies are better positioned to provide funding and support legalization efforts from a distance.

Assess the legal issues related to land tenure and identify the most significant obstacles to sustainable production. Multi-stakeholder working groups can offer diverse expertise and experience, while companies can provide legal expertise to identify bottlenecks and regulatory challenges that hinder legalization of smallholder production.

Clarify how legalization will contribute to sustainable conservation and production goals:

  • Inside forest reserves, recognize land claims of Indigenous Peoples.
  • Outside forest reserves, customary land tenure may conflict with government titling, or private land titling may be incomplete. In either case, the lack of clear land rights can create an informal and insecure land market that undermines incentives for individuals, cooperatives, and small enterprises to invest in sustainable production. Clarifying and formalizing tenure can support the security and sustainability of commercial production.

Government agencies play a central role in galvanizing and legitimizing any multi-stakeholder legalization initiative. If agencies with authority over land rights are not already part of the multi-stakeholder group, participating agencies or companies with the right relationships can wrap them into the discussions.

To resolve legal issues, companies should prepare to do substantial outreach, support, and dialogue.

  • To help resolve tenure conflicts, companies can provide funding for technical expertise, mediation, and other services.
  • Where there is informal production, companies can incentivize farmers and local traders to register and become licensed by committing to purchase from them, and/or by offering other services and support.
  • Companies can also advocate with government agencies to simplify administrative requirements for small-scale commercial production.

External conditions that improve likelihood of success

The business case for this intervention

Support additional/alternative livelihood activities and practices that reduce pressure on forests

Duration of engagment

Medium-Long (2 years for baseline assessment and planning; 5 years to achieve self-sustaining alternative livelihoods)

Cost

($)

Staff time to liaise with jurisdictional governments and communities

($)

Costs associated with workshops and meetings

($)

Training on developing new products, entrepreneurship, and attracting investment (e.g. business and investment plans)

($$)

Participatory socio-economic studies to identify gaps, needs, and opportunities

($$)

Processes to implement FPIC, when needed

In the real world

While companies have long helped farmers and communities to diversify livelihoods, few have done so as part of landscape/jurisdictional strategies. The following cases include some in which companies have taken important action in the absence of agreed or clearly articulated L/JI goals and priorities. If undertaken in the context of an L/JI, the same actions can leverage partners’ efforts and help to deliver significantly greater impacts.

1

West Africans cook food without consuming forests

Nestlé has distributed over 800 efficient cookstoves in Côte d’Ivoire and Ghana to reduce pressure on forests and improve family health. The company has also helped establish village savings and loan associations for over 9,400 people to finance their small business opportunities.

2

Preventing future unemployment-driven deforestation

Golden Agri-Resources (GAR) offers livelihood packages to the communities that supply its labour force. The company recognizes that automation trends in palm oil production will displace labour and erode jobs over time, at which point underemployed workers may take up unsustainable practices to make up lost income. To anticipate and mitigate this risk, the company livelihood package includes training, support with agricultural inputs, and market access for activities like yield improvement on rubber plantations, organic farming, and aquaculture. GAR also manages an outgrower scheme, in which smallholder cooperatives gain dedicated training to convert non forested community land into productive plantations.

3

Boosting productivity, shrinking farmland footprints

Hershey’s has invested in increasing the economic resilience of cocoa farmers by supporting over 14,000 farmers in sustainable livelihood and income diversification programs. These programs provide training on cassava and plantain production and other income generating activities, which may help farmers earn enough that they need not expand their farm footprints. It has also helped to establish almost 200 Village Saving and Loan Associations, totaling over 5,000 farmers, to educate communities on responsible saving, borrowing, and investment. These Associations have provided over US$ 250,000 in loans to support education and micro businesses.

4

Earning income without jeopardizing Ghana’s forests

In 2018, Benso Oil Palm Plantation (BOPP) partnered with communities in Ghana’s Adum Banso traditional area, Proforest, and Partnership for Forests to address challenges faced by smallholder palm oil producers. This initiative trained farmers on social and environmental best practices for growing palm oil and worked with local NGOs to develop alternative livelihood schemes to prevent further clearance of forest frontiers. Over time, stakeholders formed local Forest Landscape Governance Board Committees to oversee efforts to protect forests and reduce social impacts in the area.

Key points for companies

Determine whether the target landscape/jurisdiction has set a goal to promote additional or alternative livelihoods to those that drive forest loss or environmental degradation. If so, companies should align their efforts with the L/JI’s goals and geographic priorities. Alignment could mean redirecting and/or expanding current livelihoods support or investing in programs delivered by others. Upstream companies with robust community outreach capacities can take the lead in training for alterative livelihoods, backed by funding and incentives from downstream companies.

Companies can support additional/alternative livelihoods if they:

  • Identify value-addition opportunities within the supply chain
  • Support crop diversification through land assessment, farmer extension services, and long-term commodity purchasing programs
  • Promote other viable business opportunities that generate non-farm employment in target communities (e.g. clean energy, clean water, education)
  • Help farmers develop financial literacy, management, and entrepreneurship skills
  • Invest seed capital into micro-finance for small and medium enterprise development (directly and with local, national, and international co-investors)

There are various strategies to unlock additional or alternative livelihoods:

  • Support stakeholder mapping and analysis to identify who needs what outcomes, and why. Collaborate with an organization that has a track record supporting community economic development. Then help stakeholders establish governance structures, appropriate smallholder schemes, livelihood models, and mechanisms for monitoring and evaluation.
  • Identify alternative livelihood opportunities in the company’s operations and supply chains that are consistent with the strategies of the L/JI. For example, companies could promote alternative crops in suitable locations, invest in shared processing plants, and expand economic opportunity to women.
  • Open new alternative livelihood opportunities by contributing business planning expertise, funding the provision of relevant expertise, and encouraging and supporting the participation of relevant suppliers. Specific arenas for support include:
    • Business models: conduct market research on service industries and sustainable forest-based, agricultural, or non-natural resource products; product development; market testing; business plan development; legal entity establishment
    • Human resources: assess capacities and bridge gaps for village planning groups, community-based entrepreneurs, innovation hub managers, business expert rosters, and government economic development agencies and programs
    • Institutional and policy dynamics: assess how best to integrate new products and services into local and regional economic development plans and programs, as well as changes needed to regulatory frameworks to enable and incentivize community-based enterprises and regional industries
    • Investor communication and outreach: identify potential investors and engage them through a well-developed communications and marketing effort; present a compelling business opportunity, facilitate due diligence, and broker relationships
  • Train and build the capacity of local communities to establish and run small businesses. Communities often need help promoting a savings culture to boost their financial management skills and credit worthiness. Companies should align support with the L/JI’s objectives, with an eye to helping today’s new businesses become future sustainable supply chain partners.
  • Promote regular progress reports to the L/JI from beneficiaries trained in alternative livelihoods.

External conditions that improve likelihood of success

The business case for this intervention

Support landscape restoration in line with L/JI objectives

Duration of engagment

Long (3-5 years)

Cost

$$-$$$$ depending on scale of restoration, availability of other sources of funding, and extent of existing capacity (staff nurseries, monitoring systems, etc.)

In the real world

1

Restoring forests in Malaysia

To support the conservation goals of Sabah, Malaysia, Unilever is funding the restoration of 1,400 ha of riparian forests and wildlife corridors. Unilever funds have enabled a local timber plantation company, Sabah Softwoods Berhad, to restore a wildlife corridor that links large blocks of intact forest. This has allowed elephants and other species to travel between forest areas unimpeded, which has dramatically reduced loss of revenues due to crop damage on plantation land. There are also plans to restore riparian reserves, where oil palm trees were wrongly planted up to riverbanks, which will protect rivers from sedimentation and rehabilitate pathways for wildlife movement.

2

Leveraging agroforestry for landscape restoration in Indonesia

Working with Conservation International and the Tapanuli Selatan district government in North Sumatra,Indonesia, Unilever has initiated a 100 ha agroforestry pilot that will restore native trees to the landscape. By training farmers to make money from multi-species agroforestry systems, the pilot also will help stem illegal incursions into the forests for small scale palm oil production. The initiative is intended to serve as a best practice model for transitioning smallholder production in support of the district-wide goal to restore 21,000 priority hectares and the province-wide goal of restoring 500,000 priority hectares by 2030.

3

Co-planting forests and food to restore degraded landscapes in Ghana

Mondelēz International is supporting restoration of 400 ha in Ghana’s Brong Region in collaboration with Ghana’s Forestry Commission, UNDP, and communities around the Ayum Forest Reserve. With government permission, Mondēlez and UNDP advanced restoration in the Reserve using the Modified Taungya System, whereby farmers receive access to degraded areas for planting trees interspersed with food crops until the tree canopy closes. The partners created nurseries to raise native tree seedlings chosen for ecological fit and utility to local communities, distributed 2 ha plots to farmers, and are developing a scheme to pay participating farmers for environmental services.

0

Unlocking Brazil’s basin-level restoration priorities

In partnership with WWF and local NGOs, International Paper (IP) and HP are funding restoration of 600 hectares in Brazil’s Atlantic Forest biome. IP funds have supported prioritization of land parcels for restoration in São Paolo and Minas Gerais states, convening local stakeholders to agree on the prioritization and implementation strategies, landowner outreach, planting operations, and monitoring of plantings. HP funds are leveraging this investment to expand the area restored in São Paolo state, and to replicate this work in Paraná and Rio de Janeiro states. These efforts are advancing basin-level restoration priorities to protect riparian areas and ensure connectivity of key biodiversity habitats.

Key points for companies

Determine whether the target landscape/jurisdiction has identified the extent and type of degradation, set a restoration goal, and mapped areas in need of restoration. If so, support restoration in one or more prioritized areas.

If restoration goals have not yet been set, work with other stakeholders in the landscape/jurisdiction to define them (see “Co-design jurisdictional goals, key performance indicators (KPIs), and implementation strategies”), knowing that long-term sustainability must mitigate the underlying causes of deforestation and degradation.

If restoration areas have yet to be prioritized, work through the L/JI with local experts (e.g. government agencies, NGOs, universities, naturalists) to determine where restoration would have the highest impact. Optimal locations maximize benefits for nature (e.g. habitat connectivity, water flows) and communities (e.g. non-timber forest products, poverty reduction, health) at the lowest cost.

Fund local partners to procure tree seedlings and cover the costs of planting them in prioritized areas. If nurseries can’t provide enough seedlings to match the scale of planned restoration work, consider funding their expansion and partnering with botanical gardens. Funds are also needed for maintenance and monitoring to ensure plantings survive.

As restoration includes not just direct costs (e.g. buying, planting, and weeding around seedlings) but also opportunity costs to landowners from not farming on restored land, companies should pay landowners and managers for environmental services generated when they reserve and maintain portions of their land toward restoration. Establishing a system for ongoing payments increase the odds of long-term success. Companies can offer premium crop prices to farmers undertaking restoration, make direct payments based on evidence of continuing restoration, or contribute to restoration funds at the community or landscape/jurisdictional level. To ensure that incentives to maintain restored areas endure, companies should position other entities to take on these payments over time.

External conditions that improve likelihood of success

The business case for this intervention

Enhance sustainability-pegged financial flows to producers

Duration of engagment

Short-Medium: training (1-3 months); engaging with a fund to support smallholders (1 year); providing loans, guarantees, or offtake agreements or (up to 3 years).

Cost

($)

Staff time to engage with government and/or private financial institutions to create/improve a development fund to support smallholders

($)

Staff time and/or funding to train smallholders on financial basics

($-$$$)

Direct loans to smallholders

($$)

Guaranteed smallholder loans or offtake agreements

In the real world

Many companies help smallholders gain access to financing, but these efforts have rarely been connected with broader landscape/jurisdictional strategies. If undertaken in the context of an L/JI, the same efforts can leverage partners’ works and deliver significantly greater impacts.

1

Lending cash to conserve the forests’ future

In Ucayali, Peru, the French chocolate company KAOKA signed a long-term partnership agreement with a cocoa producers cooperative (Collpa de Loros), which leveraged the agreement to lower its risk profile when seeking a loan. The loan enabled the cooperative to invest in cocoa harvesting and processing infrastructure, rehabilitate 200 hectares of cocoa plantings to increase yields, and develop demonstration plots to boost productivity even further. The cooperative also received the equivalent of a US$285,000 loan guarantee from a regional development fund established by the Ucayali government (FONDESAM), on condition that it agreed to maintain existing forest cover on the individual producers’ farms. About 100 smallholders were able to use this credit guarantee to access a US$385,000 bank loan at an interest rate 5% lower than the prime rate offered by the traditional agricultural lender, Agrobanco. The Ucayali government is now working to scale and replicate the successful financing of this cooperative by developing a technical assistance and financial incentive program for producers that adhere to sustainability criteria contained within the regional government’s Marca Ucayali initiative.

2

Leveraging loans to transform palm oil production

In Colombia, Cargill is teaming up with Solidaridad and Oleoflores to offer loans used by farmers to implement sustainable palm oil production practices. Under this program, a credit scoring tool considers farmers’ agronomic practices, collateral, and capacity for repayment to show which farmers are eligible for loans. The program aims to extend credit to more than 5,000 farmers across the country.

Key points for companies

Determine whether the target landscape/jurisdiction has set a goal around enhancing smallholder finance in support of sustainable production. If so, companies should align their efforts with the L/JI’s goals and geographic priorities. Alignment could mean adjusting their own existing efforts or investing in programs delivered by others. Upstream companies with capacity to engage smallholders should take the lead; downstream companies can provide funding to support financing programs.

Identify which smallholders need to participate to meet landscape/jurisdiction-level conservation and sustainable production goals, and determine what they need to succeed:

  • If not already organized into groups, encourage smallholders to do so, with help from local civil society organizations.
  • Identify the financial hurdles that prevent smallholders from earning a living in a way that protects forests and meets other conservation goals.
  • Design interventions in a way that links financial access to forest protection and/or soil conservation, better cropping practices, etc.
  • Ask smallholder participants to provide geo-coordinates (an effort eased by technical assistance) for their plots, thus enabling remote sensing to monitor performance and ensure compliance with forest conservation agreements.

Tailor the specific form of a company’s intervention should to the identified financial hurdles:

  • If farmers lack capital to invest in sustainable practices, a company could provide long-term contracts to help them access loans with reasonable terms. That would enable smallholders to make the needed investments yet maintain their livelihoods for the loan’s duration.
  • If farmers lack experience or comfort dealing with banks, a company could help train them to engage in the formal financial market. Smallholders could especially benefit from assistance in creating the formal business plans that lenders require before deciding to extend credit. A company could also foster relationships between smallholders and a microfinance, regional, or national financial program/institution. They are uniquely positioned to show the big picture of how access to finance can build financial security, and can help smallholders gain saving, borrowing, and repayment experience.
  • If farmers can’t provide lenders with a loan guarantee, or collateral, a company could step in to guarantee loans on smallholders’ behalf. It could also negotiate long-term offtake agreements with smallholders for the commodities they produce, which could serve as collateral for their loans.
  • If farmers are so small or remote, they can only access disadvantageous loan terms, a company can offer supply chain financing, extend other forms of credit, or offer small loans to these farmers directly. Such alternative loans should offer terms on par with traditional financial institutions, structured flexibly enough to account for the more challenging environments smallholders face. Alternatively, a company might advocate and work with government to create or improve a development fund designed to finance smallholders that have difficulty accessing credit from traditional lenders. In both cases, the company should streamline the loan process, for example by creating a way for smallholders to prequalify their business plans with potential funders.

Consider both up-front financing to support a transition to sustainable production, and results-based payments that reward smallholders and communities for maintaining forest cover and other valuable natural resources in the landscape. Results-based payments can take the form of: renewable offtake guarantees, where renewal is contingent on forest protection; periodic direct payments to households, cooperatives, and/or community funds for forest protection; and/or contributions to jurisdiction-level or national funds (for example, REDD+ funds) that are allocated to communities and smallholders by an L/JI in exchange for forest protection.

  • Where local laws provide payment for environmental services, companies can connect smallholders with information about how to access these funding streams.

External conditions that improve likelihood of success

Business case for undertaking this intervention

Support farmer training on best management practices and provide incentives to implement them

Duration of engagment

Medium-Long (1-5 years)

Cost

($)

Sharing knowledge and experience

($$)

Funds to conduct farmer baseline assessment, if needed

($$)

Processes to implement FPIC, when needed

($$)

Funds to support implementing agencies that coordinate and conducting farmer training and extension

($$)

Staff time to conduct farmer trainings

($$)

Monitoring and evaluation

($$$)

Resources and supplies provided to farmers (e.g. harvesting equipment, seed, fertilizer)

In the real world

Company support for farmers to improve production practices is not new. Yet these efforts are too often disconnected from broader landscape/jurisdictional strategies. The following examples include cases in which companies took important action in the absence of agreed or clearly articulated L/JI goals and priorities. If undertaken in the context of an L/JI, such actions could leverage partners’ efforts and help to deliver significantly greater impacts.

1

Training smallholders to reduce deforestation

Unilever helps Indonesian oil palm farmers improve management practices in several jurisdictions. The company funds project implementers to help certify smallholders to the Roundtable on Sustainable Palm Oil (RSPO) standard. That process involves mapping and surveying smallholders, identifying gaps to obtain certification, securing the required land titles and business permits, providing personal protective equipment, training on Good Agricultural Practices, socializing expectations around no deforestation, peat, and exploitation, and building farmer groups and internal control systems. Unilever also buys the RSPO credits smallholders generate once they are certified. Examples include:

a. In the Kotawaringin Barat district of Central Kalimantan province, the company has partnered with the district and provincial governments, Earth Innovation Institute, and Yayasan Inovasi Bumi to advance jurisdiction-wide palm oil certification across the village of Pangkalan Tiga. Unilever provides capital to establish extension services for certifying smallholders, secure agreements for certified products, and incentivize sustainable production. By the end of 2017, the project had certified 190 independent smallholders under the RSPO and Indonesian Sustainable Palm Oil standards and is targeting over 1,000 more.

b. In the Indragiri Hulu and Indragiri Hilir districts of Riau province, Unilever partnered with Daemeter, World Education International, an independent palm oil mill, and surrounding independent smallholders to improve smallholder yields. Company funds enabled the mapping of 4,000 farmers, training of 1,864 at Farmer Field Schools, and hiring 26 Farmer Facilitators. Farmers learned Good Agricultural Practices, and gained awareness on no deforestation, peat, and exploitation objectives, while still improving productivity.

c. The Coalition for Sustainable Livelihoods (CSL) is a multi-stakeholder initiative in Aceh and North Sumatra provinces aimed at driving economic development, reducing poverty, and improving natural resource management. Unilever is supporting the CSL by engaging their palm oil suppliers and funding Conservation International and the regency government of Tapanuli Selatan in North Sumatra to train 1,000 smallholder farmers at a sustainable palm oil field school. Lessons focus on Good Agricultural Practices for oil palm production as a step toward achieving RSPO certification. (Unilever is also supporting restoration in this landscape – see “Support landscape restoration in line with L/JI objectives”).

2

Building capacity for greener farms

Musim Mas and IFC lead a large Indonesian program that, by 2020, targets 20,000 smallholders for outreach 2,000 for capacity building to achieve RSPO certification. In the regency of Aceh Singkil, General Mills and Musim Mas are collaborating to create a ‘Smallholder Hub’ that trains smallholder palm oil farmers in Good Agricultural Practices, business management, and practices that avoid deforestation and degradation of peat soils. General Mills will fund half of a two-year program that targets 1,000 smallholders. To expand the program’s reach Musim Mas will train government extension officers who will then in turn train smallholders. Musim Mas aims to establish additional Smallholder Hubs to facilitate companies combining their resources and expertise to train farmers.

3

Investing in ranchers to shrink cattle’s forest footprint

Sao Marcelo Farms, a large livestock seller in Mato Grosso, Brazil, is working with Carrefour and IDH to engage its calf suppliers to improve quality, intensify production, conserve forests, and comply with environmental and land use laws. This work is carried out under the PCI Regional Compact in the Juruena River Valley – a regionalization of Mato Grosso’s statewide Produce, Conserve, Include (PCI) initiative. In 2018, Carrefour entered into a three-year partnership with IDH to increase sustainable cattle production in the Juruena and Araguaia valleys, where the company’s foundation is investing EUR 1.9 million in 450 ranchers who will intensify cattle production on smaller land footprints, restore degraded pasture, access credit, and comply with Brazil’s Forest Code.

4

Custom-tailored training for cocoa farmers in the field

Three dozen leading cocoa and chocolate companies are engaging the governments of Côte d’Ivoire and Ghana through the Cocoa & Forests Initiative—an agreement and accompanying action plan to end deforestation from cocoa production and reforest degraded landscapes. Under CFI action plans, companies directly provide or finance the training of cocoa farmers in Good Agricultural Practices and Climate-Smart Agriculture in Cocoa. For instance:

a. Cargill Farmer Field Schools bring community facilitators to train groups of farmers in the field for seven months of demonstrations, idea sharing, and field practices that enhance climate resilience. Cargill also offers one-on-one coaching to help farmers develop digital Farm Development Plans to improve their long-term financial planning and has established seedling nurseries for native tree species to provide stocks for transplanting onto farms.

b. Touton uses its Rural Service Centre (RSC) model in Ghana’s Ashanti and Brong Regions to introduce farm-level training, professionalization, coaching on climate-smart principles, and support in creating Farm Development Plans. Together with Solidaridad, the company uses an app that standardizes the farmer engagement process: first it sensitizes farmers on the need to professionalize farm practices in ways that increase yields and improve wellbeing; then it generates a set of recommendations tailored to each farmer’s stated aspirations regarding cocoa farming; finally, it asks whether farmers wish to enroll in the training program. RSC agronomists train enrolled farmers to rehabilitate degraded cocoa farms, properly use agricultural inputs, and develop business skills for planning investments. Touton and Rainforest Alliance implement another app, FarmGrow, which provides farmers with long-term personal coaching plans and techniques to improve cocoa yields on existing cultivated land. The app combines detailed household profile data with the agronomic status of cocoa plots to create a business plan, complete with a profit-and-loss statement tailored to the individual farm. By collecting data about farmer interests, Touton can segment and tailor the support it provides and more effectively direct investments.

c. To inform its investments and enhance cacao agroforestry, Cémoi conducted baseline studies of farmers’ agricultural practices and perceptions of non-cacao trees. It then developed cacao-based agroforestry models, invested in nursery capacity to increase availability of seedlings for restoring forest cover on farms, trained nursery workers, established agroforestry resource centers, created demonstration plots, and trained and coached farmers on growing shade cocoa.

5

Training the trainers in Ghana’s forest frontline

A key strategy of Ghana’s national action plan under the Africa Palm Oil Initiative (APOI) is to eliminate deforestation associated with smallholder-grown oil palm, while helping them increase productivity by adopting Best Management Practices (BMPs). The Ghana National APOI Platform identifies Agricultural Extension Officers and Regional Crop Officers of the Ministry of Food and Agriculture as key partners who can effectively disseminate BMPs (e.g. new findings, knowledge, and techniques in managing oil palm). Since these frontline officers interact with smallholders in their daily operations, building officer capacity is crucial to achieving Ghana’s sustainability goals. Oil palm companies worked with the government and NGOs to develop a “train-the-trainer” course. The course strengthens the capacity of government officers to help farmers adopt oil palm BMPs, with regular checks to monitor progress.

6

Earning income from deforestation-free livelihoods

In 2018 Benso Oil Palm Plantation (BOPP), with Proforest and Partnership for Forests, developed a community-private partnership to help smallholder palm oil producers overcome challenges in Ghana’s Adum Banso traditional area. The initiative offered training and guidance on social and environmental best practice requirements in line with RSPO standards. It also worked with local NGOs to help smallholder farmers develop alternative livelihoods, so they wouldn’t clear forest frontiers for income.

7

Tying farmer incentives to conservation

Golden Veroleum Liberia (GVL) and IDH crafted an investment scheme that would incentivize communities to protect forests and biodiversity. Under its concession agreement with the Liberian government, the company is required to support 1ha of palm oil outgrowers – pre-contracted farmers – for every 5ha of company-managed plantation. Under the outgrower scheme, GVL and communities would develop land use plans, support community land rights, and sign production-protection agreements under which the communities would conserve 5ha of forest for every 1ha of community oil palm plantation. Outgrowers would also receive incentive payments for complying with the forest protection plan, and GVL would provide capital and technical assistance to establish the community plantations. Regrettably, the outgrower scheme has not yet materialized; changes in both the Liberian government and GVL’s management led negotiations to slow down.1

Key points for companies

A company must first determine whether the target landscape/jurisdiction has set a goal around training farmers for sustainable commodity production. If so, companies should align their efforts with the L/JI’s geographic priorities. Alignment could mean redirecting and/or expanding existing farmer training or investing in programs delivered by others. Upstream companies with capacity to engage and train farmers can take the lead, while downstream companies could provide funding and incentives for farmers to adopt best management practices.

Companies can support farmers in several ways:

Understand the dynamics that farmers confront within a given L/JI. This ensures that chosen interventions fit the context. Most farmers want to manage land sustainably but may often lack knowledge, skills, or access to money and tools that could help them do so. By understanding baseline conditions and practices, companies can better identify specific gaps that prevent farmers from increasing productivity and avoiding deforestation, and thus result in better designed and targeted interventions.

  • If these gaps have not yet been defined, consider funding local partners to collect baseline data on smallholder farmers, location and quality of forest and conservation areas, location and yield of commodity production areas, and the locally relevant government policies and programs that impact farmers.
  • More advanced initiatives may have already specified these gaps in an action plan jointly developed by a multi-stakeholder body that includes farmer representation. If so, consider selecting and undertaking one or more interventions that align with the identified needs.
  • The most advanced initiatives may have developed their own farmer training and/or agroforestry programs to disseminate best practices. Consider funding these programs to expand the number of farmers receiving training, support technical or equipment needs, or spread awareness about the programs among farmers.

Fund training and extension programs, to help farmers overcome gaps in knowledge or skills. Too often, cocoa farmers clear forest simply due to the misconception that sun-grown cocoa trees are more productive than those grown in the shade. Likewise, rubber tappers often do not know the proper cutting angle and depth to maximize latex yield from a rubber tree. Companies at all supply chain levels can fund training and extension programs run by government agencies, civil society experts, or private service providers. Producers, processers, and traders often employ in-house agricultural experts, who could directly teach and advise farmers, or augment public extension initiatives. Companies can run courses, support logistics for training sessions, provide equipment or educational materials, and distribute high-yielding seedlings and fertilizers.

  • To expand the reach of training programs, companies could compensate farmers reluctant to take time off (and forgo income) so they can afford to attend trainings.

Upstream companies should ensure farmers have access to the best available technology. Smallholder oil palm growers, for instance, often rely on inferior germplasm with yields far below those on industrial plantations; with better plant materials, they could significantly increase their incomes without needing to expand their farms.

Incentivize best management practices. Rewarding uptake of good practice through preferential sourcing from performing framers, price premiums, or long-term purchase guarantees increases the likelihood that training and extension programs will create meaningful and lasting behavior change among recipient farmers.

Fund or provide staff for monitoring and evaluation (M&E). M&E should measure the degree to which trained farmers adopt best management practices, and the impacts adoption has toward sustainable outcomes. Assessment will determine how effective farmer trainings are, and where to modify and improve interventions.

Scale the improvement of management practices. Farmers throughout a landscape/jurisdiction will benefit from access to training and tools, but an individual company can only support so many by itself. To expand the impact, a company should:

  • Share its accumulated knowledge and experience—both challenges and successes—and encourage peers to support other farmers.
  • Directly train or indirectly fund the training of government extension officers so they can reach more farmers. To avoid any perception of improper influence, be sure that government support responds to needs raised through multi-stakeholder consensus and is transparently overseen by the initiative’s stakeholders.
  • Advocate and engage with relevant government entities to embed improved management into rural development policies.

External conditions that improve likelihood of success

The business case for this intervention

1 See graphic on p.26 in Neeff, T., von Lüpke, H., & Hovani, L. (2018). Cross-Sector Collaboration to Tackle Tropical Deforestation – Diagnosing Backbone Support in Jurisdictional Programs. The Nature Conservancy: Arlington, Virginia.