Income diversification is crucial for independent oil palm smallholders to reduce the risks and impact of price and production fluctuation, which is why RSPO certified independent smallholders in Indonesia have been engaging in various activities, from selling compost to cattle grazing, to complement their income.

In West Kotawaringin, Central Kalimantan, smallholders of the Tani Subur Village Cooperative (KUD) have combined their oil palm plots with cattle rearing, by mixing cow manure with palm oil waste, such as fronds and solids from the mill to turn it into compost. The cooperative, certified by RSPO in 2017, has been producing 80-100 tonnes of compost each month, worth an estimated Rp120 million (USD8,000), and selling it to their members. 

"By using compost, we are able to reduce the cost of fertilisers in our plantations and don’t depend on chemical fertilisers that damage the soil,” said KUD Tani Subur Secretary, Mustafa. Since using compost, we’ve also found that the soil is less dry,” he added.

Besides earnings from the sales of compost, Tani Subur also sells the meat of the cattle they raise, which provides additional income to the smallholders. 

For Surianto, an independent smallholder and head of the KUD Sumber Rejeki in North Musi Rawas District, South Sumatra, a different method is used to combine cattle with oil palm, as he lets his cattle graze on the land during the day, so that the cow manure is spread across his oil palm plantation.

“I’m the only person raising cattle in our group and I want to set an example and prove that using cow manure is effective in reducing the use of chemical fertilisers,” he said. With just 10 cows, Surianto has been able to reduce the use of chemical fertilisers by as much as 30% from seven kilogrammes per oil palm tree.

According to a study conducted by Nusa Cendana University in Kupang, East Nusa Tenggara in 2018, direct integration of oil palm and cattle, as Surianto practices, carries mutual benefits. The cows eat the weeds around the oil palm trees, which enable smallholders to save 25-50% on weeding expenses. The study also found that using compost could also increase palm oil production by up to 16.7%. 

“Since I started using organic fertiliser three years ago, my fresh fruit bunch output has increased from 23-24 tonnes per year to 36-37 tonnes annually,” shared Surianto.

He added that several smallholders among the 80 members of KUD Sumber Rejeki, who obtained RSPO certification in 2019, have also expressed their interest to raise cattle. They plan to use their share from RSPO Credit sales to buy cows.

Oil palm smallholders have also gained additional income by diversifying their crops. For the past eight years, smallholders of Trading Company (UD) Lestari in Batubara District, North Sumatra, have been planting cassava between their oil palm trees that are more than 15 years old, or less than three years old, when their canopies are not lush yet. They chose to plant cassava because it is easy to maintain and sell.

Jumadi, Group Manager of UD Lestari, who has been RSPO certified since 2016, said cassava sales have helped smallholders when the price of FFB drops. "Cassava is much easier to maintain than oil palm, but it will never be the main crop because it’s only harvested once a year, whereas oil palm is harvested every month,” explained Jumadi.

According to a study conducted in 2015 by the Centre for International Forestry Research (CIFOR) and the Yaounde University, Cameroon, intercropping oil palm trees with food crops such as cassava provides many benefits for independent smallholders. The output from intercropping not only provides additional income while waiting for oil palm production to start, but also helps to meet their daily food needs.

For more information on RSPO smallholders, visit www.rspo.org/smallholders

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