In light of the ongoing COVID-19 situation, in September 2021 the RSPO Board of Governors had approved the Smallholder Standing Committee proposal to provide financial assistance to Independent Smallholder (ISH) Group members.
Membership fees were waived for active ISH Groups with Ordinary membership within the RSPO system, and was awarded to all existing ISH Group members and new ISH Group members joining within the one year fee waiver period. Additionally, a hardship allowance of 1.2 million Malaysian Ringgit was allocated to the RSPO Smallholder Support Fund as a further mechanism of financial support.
Following the Board’s approval, several smallholder groups in Thailand had been able to use the funds to alleviate the impacts of the pandemic, which has had a severe economic impact that resulted in increased unemployment and loss of household incomes among farmers. RSPO spoke with various Thai smallholder groups to find out about how they have adapted to crises and tackled some of their critical challenges through RSPO financial aid.
Cost cutting and COVID testing
Photo caption: Sustainable Palm Oil Enterprise Network Pakpanang
Among Thai smallholder groups, the main challenges have been the rise in production costs resulting from the country’s economic downturn. Benjarin Juliratchaneekron, Group Manager of the Sustainable Palm Oil Enterprise Network Pakpanang said, “Household income has fallen considerably, causing farmers to face shortages in production capital. Currently, the main production costs are higher, such as fertiliser prices, which are the main factor in oil palm production.”
Juliratchaneekron added that RSPO’s financial assistance will be used for strengthening group development. “Group members will be offered the most accurate farm management to reduce production costs while maximising yields. Macronutrients are essential for the growth of oil palm, but these are pretty expensive. If members know the sufficient proportions that are correct and suitable for the needs of palm oil, the cost of managing nutrients will be reduced.”
For Aoluek Land Settlement Cooperative Limited, RSPO certification has armed smallholders with more knowledge in oil palm plantation development. Witthaya Kongpan, President of the Cooperative said that the pandemic had affected the group in terms of higher production costs, particularly the fertilisers needed to improve soil maintenance. Increased shipping costs likewise had a significant impact on farmers. The group used the Smallholder Fund to support members and their families who had contracted COVID-19, to purchase testing kits for members and group committees, to manage the audit of the member conversion, and to assist in the preparation of quality assurance assessments.
The Sichon Palm Yangyuen Community Enterprise Group was similarly affected. Group Manager Daranee Payakamas shared, “we were impacted by the increase in production costs, such as the price of chemical fertilisers and other factors of production. This year, the average price of fresh palm bunches in Thailand are higher than the previous year, but it also has higher production costs. Farmers are left with not much income if they or a contractor are infected or are at risk of contracting COVID-19, causing an impact on the harvest and palm plantation management.”
The group aims to manage palm plantations that focus on cost reduction and sustainable productivity. “We are using the [support] funding to organise activities to encourage members to adjust soil according to soil analysis results before applying dolomite chemical fertiliser. This is to increase the suitability of chemical fertilisers for the soil conditions in members’ oil palm plantations,” he added.
The Nueakhlong-Khaophanom Community Enterprise, which counts hundreds of members, covers over 10,000 rai (more than 2,000 hectares) of palm oil plantations.
“Because smallholder groups have hundreds of members covering hundreds of plots in a wide area, lots of materials and office equipment are needed to facilitate office staff's work, so we used some of the hardship fund to improve the office,” shared Surasit Phisetsin, Group Chairman of the Enterprise.
Photo caption: Sichon Palm Yangyuen Community Enterprise Group
Doungjai Phatchot, Group Manager of the Palmtongkum RSPO Community Enterprise revealed that undergoing training for the new requirements of the RSPO Standard System has been a challenge because of the restrictions on physical meetings with participants. The group has used the support from RSPO to finance the purchase of straight fertilisers to make mixes to sell to members at a lower than market price, by paying for fertilisers in installments. Payment shall be made after the product's sale in each palm cutting cycle so farmers can have three cycles of fertiliser per year according to the needs of the crops.
“This hardship fund can help small farmers during the current state of expensive fertiliser in Thailand,” said Phatchot. “We are delighted and grateful that RSPO has recognised the importance of farmers who are RSPO members, and we can use this money to continue the group's activities.”