Srijaroen Sustainable Oil Palm Production Community Enterprise Group

“Non-governmental organisations (NGOs) working in environmental or wildlife preservation try to demonstrate the negative effects of palm farming on the environment. To avoid these criticisms, smallholders must adhere to RSPO Standards, as these are the standards recognised and accepted by NGOs.”

Mr. Chaowalit Wuttipong

Chairman of Srijaroen Sustainable Oil Palm Production Community Enterprise Group

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“We believe that working as a group benefits farmers. That is why we gathered together to apply for RSPO Membership. It took huge effort to form a group,” began Chaowalit Wuttipong, Chairman of Srijaroen Sustainable Oil Palm Production Community Enterprise Group.

“Prior to achieving membership, the factory served as a point of contact and location for palm growers to attend the meeting. An estimated 200–300 farmers were approached and asked to fill out the application for membership. Following that, the first organisational meeting was held and the representative system of attendance was used to form the group. Only 80 out of 200–300 people attended the first member meeting. The reason was that growers were unclear on the benefits of group participation.

“Initially, the factory guaranteed 5 satang premium for member productivity, and support for the old fresh fruit bunches. After one year, the group formally negotiated with the factory to request a guaranteed premium rate, as there were additional costs from deploying advisor teams to function as farmers’ mentors. The agreement was successful and the group is now able to sell palm for a higher premium of 25 satang.”

When questioned about the initiative’s benefits, Chaowalit remarked, “The group has focused on educating members about harvesting quality products. They cut ripe palm fruits of higher quality and the factory could see the difference between RSPO Certified and non-certified products.

“When the factory became stringent in screening out raw palms, RSPO palms were not removed because RSPO Members provide greater numbers of ripe palms. When smallholders saw that joining RSPO can generate better results, non-certified farmers wanted to copy those practices.” 

Addressing the social and economic impacts on the local community stemming from RSPO Certification, Chaowalit explained, “This is difficult to assess because each member cultivates more crops than just palm. Some have rubber plantations, while others have fruit farms or only sell palms. The group has not yet collected data or analysed how RSPO Standards contribute to the well-being of farmers.

“The group provides trainings to members on environmental preservation, protection of conservation value areas, avoiding harm to endangered animals and preventing greenhouse gas emissions within members’ plots,” Chaowalit stated of the current social or environmental initiatives. “The group did not explicitly delineate these projects but our training implementation aims to meet RSPO Standards.

“Although the group is 100% independent in the supply chain, Sri Charoen factory purchases the majority of our products,” Chaowalit remarked about supporting partners, organisations and extraction mills. “Crude palm oil produced from Sri Charoen will be delivered to Patum Vegetable Oil while Shell (Thailand) purchased biodiesel from Patum Vegetable Oil. The extraction mill pays the group direct premiums. 

“In our area, there is high competition to buy fresh palm fruit bunches,” said Chaowalit when describing the difficulty in transitioning to sustainable palm plantation. “Various ’pricing tactics’ have confused members at times. 

“The Oil Palm Bunch Collection Centre offers higher prices to compete with RSPO. For example, RSPO gives a premium of 10 satang at the point of sale and accumulates another 5 satang. Assuming RSPO gives THB 6.10, the Collection Centre will also give THB 6.10. They are willing to buy at a premium due to the quality of the products. Because of its close proximity to the farms and competitive pricing, farmers agree to sell to Oil Palm Bunch Collection Centre. Sometimes it’s all about local culture. That is, the people at the Oil Palm Bunch Collection Centre are acquainted with the local farmers in a ‘brother-to-brother’ style support. As a result, they ask their families to urge other farmers to sell to the Centre. This is a concern for the group as the output strays from the supply chain system,” Chaowalit explained.

“To address these concerns, the group must build trust among members and explain that when group productivity is sold out of the system, that leads to the group losing income for internal management. This weakens the group and if this trend continues, the group will not be able to survive due to the lack of revenue for business administration. Without an RSPO Certified group, there will be no guarantee of premium prices. The Oil Palm Collection Centre will pay the market rate. Price competition will continue to exist. Farmers will no longer have a competitive advantage.

“Another impediment to group management is the actual approach to farming. Growers continue to farm in traditional ways that have been handed down from generation to generation, which has an influence on palm farm management practices. Compliance is not yet routine, as for example with fertilisation and systematic business plans.

“On the other hand, farmers now have a better understanding of fertilisation. Earlier, they were unaware of proper fertiliser application and the available supplemental nutrients. The factory worked with the group and supported them by ordering fertilisers for members at group cost prices. We send mentors to assist farmers to develop business plans so that they can anticipate how much profit they keep each month and the amount to use for farm activities.”

Regarding next year’s goals and the five-year plan, Chaowalit said, “2021 is the second year of the five-year plan. The group plans to have 500 members by 2024. During this period, it is necessary to develop more efficient mentors.”

When asked what the biggest change is after switching to sustainable palm plantation practices, Chaowalit explained, “Members are more knowledgeable about proper palm plantation practices. Members will continue if they follow the group’s business management procedures, regardless of palm price variations.”

Asked about the key factors ensuring farmers’ long-term RSPO Certification, Chaowalit responded, “There are two sides to the coin. One side is product deprivation because palm oil competes with soybean oil in European markets. Those who use palm oil to produce products must promote palm oil in the market because it generates income and profit.

“At the same time, Non-governmental organisations (NGOs) working in environmental or wildlife preservation try to demonstrate the negative effects of palm farming on the environment. To avoid these criticisms, smallholders must adhere to RSPO Standards, as these are the standards recognised and accepted by NGOs.

“NGOs are an essential component of RSPO’s annual meetings. They partner in establishing environmentally responsible practices. Companies that bring extracted oil to manufacture different kinds of products should support RSPO palm plantation as a means of sustaining markets, because that paves the way for their products. If palm oil is not guaranteed by RSPO, it will eventually be banned. Therefore, the group is optimistic about the long-term viability of RSPO Standards, especially with its ambition to make sustainable palm oil the norm. In other words, we need to make every drop of palm oil be RSPO Certified,” Chaowalit emphasised.

“The group has applied a mentor system when visiting farmers’ plots,” Chaowalit detailed specific techniques of coordinating with smallholder farmers. “We explain membership benefits and share information to people who are interested in becoming members. Such mentors play a vital role in coordinating with networks, which are the key elements in maintaining sustainable palm plantation practices. The group uses the Internal Control System (ICH) to connect with farmers and keep all mechanisms of the group moving forward.”

In summary, to ensure that smallholder groups continue successfully to be certified by RSPO, Chaowalit outlined, “It is important to establish a strong group and learn to comply with RSPO Standards. The group must have proficient leaders and teams that are keen on putting the standards into practice.

“As a group representative, creating a sustainable palm oil group has its challenges. It is crucial that each group knows how to align themselves with the conditions, criteria, requirements and auditing approaches of RSPO,” the Chairman of Srijaroen Sustainable Oil Palm Production Community Enterprise Group concluded.

Total area covered by the project
2744 Ha

Number of smallholders benefitting from this project
345 Smallholders

Number/percentage of women supported by this project
36.81% women in this project

The group is seeking funding and experts to develop an application that will be used for the group’s project development.

Representative Contact
Throngsak Banpaung | Group Manager | [email protected] |

Chaowalit Wuttipong
Chairman
(+66) 95 497 2307
[email protected]

Representative Contact

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Srijaroen Sustainable Oil Palm Production Community Enterprise Group

Srijaroen Sustainable Oil Palm Production Community Enterprise Group

Srijaroen Sustainable Oil Palm Production Community Enterprise Group

Srijaroen Sustainable Oil Palm Production Community Enterprise Group

Srijaroen Sustainable Oil Palm Production Community Enterprise Group

Srijaroen Sustainable Oil Palm Production Community Enterprise Group