Impact for Change: Smallholder Inclusivity, The Case of Siak, Riau

This business case aims to document best practices of collective actions among stakeholders in assisting smallholders. The case study showcases scalable solutions to potential private stakeholders in generating a more inclusive business model among companies. This in turn will be crucial in exploring growth opportunities and supporting sustainable value creation among smallholder palm oil farmers; in this case for smallholders in Siak Distrik, Riau. More than fifty percent of palm oil productions in Riau, Indonesia can be traced back to the private sectors; however, smallholder farmers make up for 380,000 plantations which cover a total area of one million hectares, producing an estimated number of 5.9 million tons of fresh fruit bunches (FFB) per year.

The document also highlights the problems faced by smallholder farmers — which contribute to a number of sustainability issues, such as deforestation and social consequences — and what can be done, as well as what has been done, to establish a healthy ecosystem, improve sustainability and practice business inclusivity with the end goal of mitigating future risks. The case study also explores business opportunities through collaborative actions, such as the inclusion of smallholder farmers as part of the business value chain, mapping the heterogeneity of actors that make up smallholder palm oil economy, implementing sustainable solutions, overcoming certification challenges, and understanding the complex nature of the palm oil sector.