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Indonesia | Production
Danish Government promotes "sustainable" palm oil production in Indonesia Rokan Hulu's Landscape and Livelihoods Initiative boosts sustainability and smallholder engagement. 6/2/2025
A new partnership aims to boost palm oil production in Indonesia to make it more inclusive, sustainable, and resilient. The Rokan Hulu Landscape and Livelihoods Initiative brings together the global integrated palm oil group Musim Mas, the packaged sweet food company Ferrero, the non-governmental organizations (NGOs) Preferred by Nature, Agriterra, and the Sustainable Agriculture Network (SAN). Funded by the Danish government's Danida Green Business Partnerships (DGBP) program, this initiative aims to improve the livelihoods of independent smallholder farmers, protect the environment, and promote sustainable palm oil production in accordance with sustainability standards and global regulatory frameworks, including the EU Deforestation Regulation (EUDR). Rokan Hulu Landscape and Livelihoods Initiative This five-year project focuses on implementing scalable solutions for sustainable palm oil production. Its goal is to support 5,400 independent smallholder farmers in adopting regenerative agricultural practices that improve growing conditions, reduce synthetic inputs, and strengthen climate resilience. The Rokan Hulu Landscape and Livelihoods Initiative will also strengthen two farmer organizations and help 2,500 farmers achieve certification according to the Roundtable on Sustainable Palm Oil (RSPO) and Indonesian Sustainable Palm Oil (ISPO) standards. In addition, it aims to create diversified income opportunities for 2,000 community members—60% of whom will be women—while implementing measures to safeguard biodiversity and mitigate deforestation risks. A key element of the initiative is the establishment of a jurisdictional multi-stakeholder alliance to promote ecosystem restoration and ensure compliance with sustainability standards. Preferred by Nature, a Denmark-based international NGO with extensive experience in sustainable agriculture and forestry projects, will lead project coordination, capacity building, and training in sustainable practices. The Dutch agricultural agency Stichting Agriterra will focus on strengthening farmer organizations, enabling financial sustainability, and fostering cooperative business models, while the international NGO SAN will contribute its expertise in regenerative agriculture and provide on-the-ground support through its Indonesian partners Kaleka and Setara Jambi. Both Musim Mas and Ferrero share an interest in ensuring a sustainable and traceable palm oil supply chain that meets regulatory standards and voluntary commitments. Addressing systemic challenges in palm oil supply chains This project aligns the shared goals of Ferrero and Musim Mas with development objectives by addressing systemic challenges within the supply chains of independent smallholder farmers. These challenges include low productivity, varying levels of familiarity with sustainable agricultural practices, and environmental degradation, such as deteriorating soil health. Independent smallholder farmers, who manage more than 40% of the palm oil planted in Indonesia, often face obstacles to meeting RSPO and ISPO standards, such as resource scarcity, unequal access to knowledge, and land tenure issues. This initiative aims to address these barriers by providing farmers with the tools and training needed to adopt sustainable practices, achieve certifications, and improve market access. At the landscape level, the project fosters a multi-stakeholder partnership involving business, government, and civil society actors to strengthen ecosystem protection. These efforts safeguard biodiversity and support harmonization with global sustainability standards such as the EUDR. A Model for Sustainable Palm Oil Production By combining private sector commitments with the expertise of non-profit organizations, the Rokan Hulu Landscape and Livelihoods Initiative sets a benchmark for sustainable palm oil production and creates a win-win scenario for all stakeholders. Farmers can benefit from increased productivity, improved market access, and diversified incomes. Meanwhile, partners like Ferrero and Musim Mas can ensure a reliable, sustainable, and traceable palm oil supply chain. This project also generates long-term economic benefits for rural communities, contributes to global climate goals, and positions the Rokan Hulu region as a leading example of sustainable palm oil production. This transformative initiative lays the foundation for a more sustainable and inclusive palm oil industry. By addressing systemic challenges and fostering collaboration, the project paves the way for a resilient and environmentally responsible supply chain that benefits all stakeholders. Olivier Tichit, Director of Communications and Sustainability at Musim Mas, explained: "Empowering smallholder farmers through training and support is key to building a resilient and sustainable palm oil supply chain. Musim Mas takes a landscape-based approach to sustainability. In the Smallholder Hubs where we work, we collaborate with governments, suppliers, smallholder farmers, NGOs, and other landscape actors to achieve a sustainable transformation. This project will allow us to contribute in a new dimension with our new partner." Nicola Somenzi, Head of Responsible Sourcing at Ferrero, stated: "Our goal is to create a prosperous supply chain that benefits farmers' livelihoods and communities, while protecting people and nature. Beyond sourcing RSPO-segregated palm oil for our products, our active participation in initiatives like this strengthens the foundation of a resilient and environmentally responsible supply chain that creates long-term value for all." Jakob Ryding, Senior Project Manager at Preferred by Nature, emphasized: "At Preferred by Nature, we believe that sustainable palm oil production is only possible when smallholders have the right knowledge, resources, and market access. This project demonstrates how collaboration between companies and NGOs can address systemic challenges, empower farmers, and protect vital ecosystems. We are delighted to be part of this initiative." For his part, Jose Joaquín Campos, Executive Director of SAN, commented: "By integrating regenerative agriculture and nature-based solutions, this initiative demonstrates how sustainable agriculture can simultaneously revive ecosystems and improve farmers' livelihoods." Marco Schouten, CEO of Stichting Agriterra, stated: "Strengthening farmer organizations is at the heart of what we do. This project provides the necessary tools to empower farmer organizations and their members, enabling them to cooperate to achieve financial sustainability and seize new market opportunities."
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