InfoSAWIT, JAKARTA – The Roundtable on Sustainable Palm Oil (RSPO) is pushing for a transition in the marketing model for independent oil palm farmers—from a credit-based system to the physical sale of fresh fruit bunches (FFB). This shift is seen as essential for improving traceability across the sustainable palm oil supply chain, especially in response to regulations like the European Union Deforestation Regulation (EUDR).
RSPO Indonesia Deputy Director for Market Transformation, Mahatma Windrawan Inantha, explained that the credit system used by many independent farmers lacks physical product transactions, making it difficult to trace the origins of sustainably produced FFB when sold to mills.
“The credit system is not accepted under the EUDR because it doesn't establish a direct link between the sustainably grown FFB and the buyer. We aim to upgrade from selling credits to selling physical FFB directly from certified independent farmers to certified mills,” Windrawan told InfoSAWIT during the Thought Leadership Forum held at Trisakti University, Tuesday (27 May 2025).
A concrete example is underway in Aceh Tamiang, where RSPO is working with the Sustainable Trade Initiative (IDH) and PT Mora Niaga Jaya to build an integrated supply chain model. This program aims to improve traceability, transparency in pricing, and incentives for farmers.
“In this program, mills are even willing to pay above the government reference price,” Windrawan said. “It shows that if the market demands sustainable and traceable products, there is real added value.”
Nonetheless, land legality remains a major challenge. Many independent farmers lack proper land ownership documents, making them hesitant to join the integrated system. “Previously, a simple letter was enough. Now, with EUDR and stricter global market demands, land verification has become more rigorous,” he added.
The initiative is also expected to raise farmers’ awareness that selling physical FFB through a traceable system allows them to contribute directly to a more sustainable global supply chain. RSPO is committed to not only forming farmer groups but also mentoring them to become ready to supply products accepted in premium markets.
“What matters is not just selling the physical fruit, but understanding that under this system, farmers are valued more because their fruit comes from responsible practices,” Windrawan emphasized.
Through this approach, RSPO hopes independent farmers will become active players in the transformation toward a more sustainable palm oil sector in Indonesia. (T2)
