Smallholder

KoperasiSerba Usaha Suka Makmur

About the group

Number of smallholders: 31 = 24(M), 7 (W)

Total Area: 60.15 Ha

On-going Facilitator: PT Umbul Mas Wisesa of Sipef

Location of project: Sukoharjo hamlet, Tanjung Mulia village, Kampung

Country: Indonesia

Province: Rakyat sub-district, Labuhanbatu Selatan district

SUSTAINABILITY JOURNEY STORY

Creating partnership with mill helps farmers to be part of sustainable oil palm supply chain

By agreeing to create partnership with RSPO-certified mill nearby their hamlet, a small group of farmers in Sukoharjo, Labuhanbatu Selatan district in North Sumatra have enjoyed lots of improvement in their productivity and livelihoods. The situation is getting better since the group obtained RSPO certification in 2017 and started to sell 100% of the physical certified fresh fruit bunches to a certified oil mill.

The concept of sustainable practices was first introduced by PT Umbul Mas Wisesa, a mill that is part of Sipef group, a Belgian company in Indonesia to farmers in Sukaharjo hamlet, Labuhan Batu district in North Sumatra in 2015. Then the mill also mentioned about obtaining the RSPO certification, benefits of having that certification for farmers and chances tobecome part of sustainable palm oil supply chain of the mill.

Farmers who have been selling their fruits through middlemen that operate in the area, were interested in the idea especially because they will get long term contract from the mill for all their harvest. “But only with one condition, we need to follow all best management practices training and apply all procedures so we can get RSPO certification,” Handoko, group manager of Suka Makmur cooperative recalled the socialization from the mill.

The company then conducted a series of training and facilitated the establishment of the cooperative, provided training of best management practices, and other related topics that required by RSPO. The mill also assisted farmers to form a cooperative so it became a legal entity that can be a member of RSPO.

“By having this partnership with Umbul Mas Wisesa mill, we have enjoyed lots of benefitsuch higher FFB prices compared to prices of other mills that operates in the area,” Handoko said adding that other farmers who are not members of the cooperative also get the benefits. The road in our area needs a lot of maintenance and we now have a good road networks in the village. “It not only helps us to transport our harvest but also other farmers and middlemen to transport fresh fruit bunch of oil palm and other commodities from our village.”

There size of Sukaharjo hamlet is about 2,500 hectares. The company has been conducted some socialization along with the Suka Makmur cooperative, however, the reception has been cold even though other farmers were encouraged to see the benefits enjoyed by the members of Suka Makmur cooperative.
“We have tried to get more farmers to join our cooperative but so far have not been successful despite their enthusiasm to adopt our best management standards. Perhaps, farmers prefer to remain independent in choosing where they want to sell their harvest or perhaps lots of farmers still have unpaid debts to the middlemen so they cannot join the cooperative straight away,” added Handoko.

“In our case, we prefer to have long-term contract with one mill, and we become one unit of the mill’s supply base and we feel secure because the company is looking after us,” Handoko said and adding that the company also regularly took leaf and soil sample and provide fertilizer recommendation based on the analysis of the sample. “We also get all fertilizer from Umbul Wisesa and we just have to pay it in installment.”

Members of the cooperative have different planted year of palm and some of them will have to start replanting in the next few years. Handoko said the cooperative has been in discussion with its partner, Unggul EmasWisesa, to make plan for the replanting.

“The biggest challenge is the livelihood of members during the three-year period when the immature plant will not bear any fruits. How can we ensure farmers can have livelihood during this period? Will the company provide job opportunities by employing farmers to work on the replanting? That is still in discussion but if that is the case, would it be enough to cover our living cost. We don’t know yet,” Handoko said.

Project Impact

Total area covered by the project
60.15 Ha

Number of smallholders benefitting from this project
31

Number/percentage of women supported by this project
22.58% women in this project

How you can support

The group members are part of PT Umbul Mas Wisesa, a mill that is part of Sipef group. There is a potential of getting more farmers in the area to join the cooperative and become part of the certified sustainable oil palm supply chain. This effort should be appreciated by the downstream players such as Consumer Good Manufacturers or retailers.

Please give us a support in the sustainable supply chain by purchasing the RSPO Smallholders Credits.

IMAGE GALLERY

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