Biodiverse and Inclusive Palm Oil Supply Chain (BIPOSC)

The Biodiverse and Inclusive Palm Oil Supply Chain (BIPOSC) project aims to encourage sustainable practices in the palm oil supply chain by enhancing the capacity of smallholder farmers in Indonesia and strengthening the institutional framework of farmer associations. In partnership with with Livelihoods Funds for Family Farming (L3F), Danone, Mars Incorporated, Musim Mas, and World Agroforestry, the BIPOSC project has reached over 2,900 palm oil farmers in 13 villages in the Labuhanbatu District of North Sumatera and will be implemented for a 10 year period (2021-2031).

For over 30 years, growing palm oil has become the main source of income for most smallholder farmers in North Sumatera. However, current palm oil practices rely heavily on monocropping, which decreases soil fertility over a long period of time. Current trends show an increase in consumer awareness on the need to limit the environmental impacts from palm oil plantations, leading to an increased demand for a sustainable palm oil supply chain. Meanwhile, most smallholder farmers lack the knowledge on good plantation management techniques, which is crucial to improve their product quality.

These limitations, including the lack of know-how but also lack of access to alternative funding, could inhibit farmers from fulfilling the market’s demand of sustainable palm oil, threaten their source of income and livelihoods.

SNV’s approach will leverage our expertise in capacity building, institutional strengthening, and technical assistance on sustainable agriculture practices:

• Regenerative agriculture and best practice training: We provide trainings to smallholder farmers to encourage better management practices, hence improving their yields and crops quality. The trainings focus on implementing regenerative agriculture practices and goes beyond text-book knowledge to focus on increasing hands-on skills. We therefore establish a demonstration plot where farmers can apply what they have learned, giving them regular guidance to ensure correct implementation.

• Capacity building for palm oil agroforestry: In the program, we recommend 5 models of agroforestry that combine palm oil with local commodities to improve soil biodiversity. The agroforestry practice is not only introduced but put into practice through the demonstration plot, which serves as a space for learning and adoption. We provide farmers with assistance, capacity building, and regular progress monitoring.

• Institutional and business capacity strengthening for farmers groups, cooperatives, and associations: We offer comprehensive training and technical assistance to cooperatives, farmer groups, and associations to enhance their organizational and business capabilities. To support farmers in improving their businesses, we have established a composting unit that provides affordable fertilizer. Additionally, we facilitate the formation of cooperatives, where we focus on capacity building for farmer groups to strengthen their business practices, streamline collective sorting, and improve delivery processes.

• Increased access to funds for replanting and alternative incomes: The project engages and supports smallholders to tap into microcredit loan products or financial institutions for replanting needs. Independent smallholders also receive trainings on financial management to ensure they could use the loan wisely and are able to repay it.

• Women economic empowerment: We empower women farmers by creating, mentoring, and strengthening the women's group capacity. We provide trainings on financial literacy to ensure they have the right tools to manage their income. We also facilitate their access to credit and alternative funding to improve their livelihood.