Smallholder Definitions - PNG National Interpretation Working Group RSPO TFS Meeting - 1 November 2009

Smallholder Definitions - Smallholder Definitions - PNG National Interpretation Working GroupPNG National Interpretation Working Group

RSPO TFS Meeting - 1 November 2009RSPO TFS Meeting - 1 November 2009

Presentation:Presentation:• Oil palm smallholders in Papua New GuineaOil palm smallholders in Papua New Guinea• Smallholder classification and how this fits with the Smallholder classification and how this fits with the

PNG realityPNG reality• PNG NIWG definition and draft guidance for a 3PNG NIWG definition and draft guidance for a 3rdrd

category of smallholdercategory of smallholder

Introduction:Introduction:• RSPO has adopted a binary classification system for RSPO has adopted a binary classification system for

smallholders; ‘scheme’ & ‘independent’ smallholderssmallholders; ‘scheme’ & ‘independent’ smallholders• PNG doesn’t fit adequately within this classification systemPNG doesn’t fit adequately within this classification system• PNG is using the ‘independent’ smallholder definition as this PNG is using the ‘independent’ smallholder definition as this

best describes the smallholders themselves, however higher best describes the smallholders themselves, however higher standards of compliance are achievablestandards of compliance are achievable

• The PNG NIWG agreed that the development of a third The PNG NIWG agreed that the development of a third category of smallholder was necessary and has prepared a category of smallholder was necessary and has prepared a definition and draft guidance for ‘Associated’ smallholdersdefinition and draft guidance for ‘Associated’ smallholders

RainfallRainfall 1800 - 5000 mm / year1800 - 5000 mm / year

SunshineSunshine min of 2000 h / yearmin of 2000 h / year

TemperatureTemperature between 22 – 32between 22 – 32oo C C

AltitudeAltitude less than 500 m above SLless than 500 m above SL

Factors that affect growthFactors that affect growth : :

KimbeKimbe

Mt. HagenMt. Hagen

DaruDaru

Port MoresbyPort Moresby

RabaulRabaul

KaviengKavieng

WewakWewak

VanimoVanimo

LaeLae

AlotauAlotau

PopondettaPopondetta

GusapGusap

Oil Palm in PNG:

1967 Hoskins1967 Hoskins

1969 Bialla1969 Bialla

1976 Popondetta1976 Popondetta

1985 Milne Bay1985 Milne Bay

1987 New Ireland1987 New Ireland

2005 Ramu2005 Ramu

LSSLSS

LSS

VOP

VOP

VOP

VOPVOP

VOP

Types of smallholder:Types of smallholder:Land Settlement Scheme (LSS)Land Settlement Scheme (LSS)• ~ third of all current smallholdings; alienated land; 99-yr ~ third of all current smallholdings; alienated land; 99-yr

Government lease; settlers from areas of high popGovernment lease; settlers from areas of high popnn with poor with poor development potential; now 3development potential; now 3rdrd/4/4th th generation; inward economic generation; inward economic migration; population & land pressures; no more LSSmigration; population & land pressures; no more LSS

Village Oil Palm (VOP)Village Oil Palm (VOP)• Villagers growing oil palm on their own customary land; low Villagers growing oil palm on their own customary land; low

productivity; productivity; Customary Rights Purchase Blocks (CRPB)Customary Rights Purchase Blocks (CRPB)• Purchase of usage rights, not title; Customary Land Usage Purchase of usage rights, not title; Customary Land Usage

Agreement; more significant in areas of high population pressureAgreement; more significant in areas of high population pressure

Smallholders receive support from:Smallholders receive support from:• A national statutory organisation (OPIC) that provides A national statutory organisation (OPIC) that provides

extensions services to smallholdersextensions services to smallholders• A national R&D service provider, PNGOPRA, which is A national R&D service provider, PNGOPRA, which is

an NGO that works for both smallholders and an NGO that works for both smallholders and plantations; andplantations; and

• Milling companies that provide, variously, FFB Milling companies that provide, variously, FFB transport, extension support and credit for tools & transport, extension support and credit for tools & fertiliserfertiliser

Area Estimates 2008 (ha)Project Area Plantation Smallholder TotalHoskins (NBPOL ) 34,783 25,223 60,006 44.7% 61.5%Bialla (Hargy Oil Palms ) 9,800 12,698 22,498 16.8%Popondetta (Higaturu Oil Palms ) 8,984 14,285 23,269 17.3%Milne Bay (Milne Bay Estates ) 11,629 1,837 13,466 10.0%New Ireland (Poliamba Ltd ) 5,689 2,533 8,222 6.1%Ramu (RAI ) 6,546 234 6,780 5.1%TOTAL 77,430 56,810 134,240

57.7% 42.3%

FFB Production in 2008 (tonnes)Project Area Plantation Smallholder TotalHoskins 751,481 379,498 1,130,980 53.5% 69.2%Bialla 168,293 162,767 331,061 15.7%Popondetta 136,638 158,661 295,299 14.0%Milne Bay 190,575 11,833 202,408 9.6%New Ireland 101,634 18,999 120,633 5.7%Ramu 32,264 0 32,264 1.5%TOTAL 1,380,885 731,759 2,112,645

65.4% 34.6%

FFB production and planted area in PNG:FFB production and planted area in PNG:

Smallholder oil palm blocks in PNG:Smallholder oil palm blocks in PNG:

Number of smallholder blocks (Dec '08)Project Area # blocksHoskins 7,181Bialla 3,649Popondetta 5,707Milne Bay 773New Ireland 1,282Ramu 110Total 18,702

Smallholder related issues in PNG:Smallholder related issues in PNG:• Low smallholder productivityLow smallholder productivity• High population, esp. in areas with LSSHigh population, esp. in areas with LSS• Limited land access for developmentLimited land access for development• Poor (or non-existent) government support services esp. Poor (or non-existent) government support services esp.

social and physical infrastructuresocial and physical infrastructure

Papua New GuineaAfrican Countries

India

SE AsiaCentral & South America

Smallholder Definitions:Smallholder Definitions:

Independent smallholders:Independent smallholders:• freedom to choose how to use their lands, which

crops to plant and how to manage them• being self-organised, self-managed and self-

financed• not being contractually bound to any particular mill

or any particular association• They may, however, receive support or extension

services from government agencies


Scheme smallholders:Scheme smallholders:• Structurally bound by contract, by a credit

agreement or by planning to a particular mill• Often not free to choose which crop they develop• Supervised in their planting and crop management

techniques• Often organised, supervised or directly managed by

the managers of the mill, estate or scheme to which they are structurally linked


Certification:Certification: Scheme smallholders should be certified along with

the mill with which they are associated Independent smallholders, who may sell their fresh

fruit bunches either directly or through intermediaries to a number of mills, are to be certified on their own through a Group Certification Protocol

Smallholder characteristics:Smallholder characteristics:• Is the smallholder's FFB certified (as opposed to CPO at the mill)?Is the smallholder's FFB certified (as opposed to CPO at the mill)?• Are the smallholders themselves certified?Are the smallholders themselves certified?• Do smallholders pay for certification themselves?Do smallholders pay for certification themselves?• Does the mill collect & transport the smallholder's FFB?Does the mill collect & transport the smallholder's FFB?• Does the mill represent the only available market place for Does the mill represent the only available market place for

smallholder's FFB?smallholder's FFB?• Do the smallholders have a contractual obligation regarding FFB Do the smallholders have a contractual obligation regarding FFB

supply to the mill?supply to the mill?• Does the mill have a legal or contractual right to enforce (or Does the mill have a legal or contractual right to enforce (or

demand) smallholder compliance?demand) smallholder compliance?• Do the smallholders legally own or have legally protected Do the smallholders legally own or have legally protected

customary usage rights to the land (independent of any customary usage rights to the land (independent of any involvement by the mill)?involvement by the mill)?

Smallholder characteristics (cont.):Smallholder characteristics (cont.):• Does the mill fully acknowledge the customary rights of smallholder Does the mill fully acknowledge the customary rights of smallholder

landowners?landowners?• Are the smallholders fundamentally ‘Independent’ in terms of their Are the smallholders fundamentally ‘Independent’ in terms of their

rights of choice?rights of choice?• Does the mill, either through Government or some other parallel Does the mill, either through Government or some other parallel

process, make provision for full and complete technical support to process, make provision for full and complete technical support to smallholders? And…smallholders? And…

• ……is this technical support limited to influencing (as opposed to is this technical support limited to influencing (as opposed to enforcing) compliance through education and awareness?enforcing) compliance through education and awareness?

• Is a project manager responsible for compliance?Is a project manager responsible for compliance?• Are the credit systems available to smallholders on a secured Are the credit systems available to smallholders on a secured

basis?basis?

Smallholder characteristics (cont.):Smallholder characteristics (cont.):

Thematic Areas:Thematic Areas:• CertificationCertification• FFB marketFFB market• Smallholder rights & obligationsSmallholder rights & obligations• Smallholder support servicesSmallholder support services


Thematic grouping: CERTIFICATION Smallholder TypeCharacteristic Scheme ASSOCIATED Independent

Is the smallholder's FFB certified (as opposed to CPO at mill)? No No Yes

Are the smallholders themselves certified? No No Yes

Do smallholders pay for certification themselves? No No Yes


Thematic grouping: FFB MARKET Smallholder TypeCharacteristic Scheme ASSOCIATED Independent

Does the mill collect & transport smallholder's FFB? Yes Optional Optional

Does the mill represents the only available market place for smallholder's FFB? Yes Yes1 No

1 By current circumstance only; not legally binding; could change; in most cases no alternative outlets


Thematic grouping: SMALLHOLDER RIGHTS & OBLIGATIONS Smallholder TypeCharacteristic Scheme ASSOCIATED Independent

Do the smallholders have a contractual obligation regarding FFB supply to mill? Yes No No

Does the mill have a legal or contractual right to force (or demand) outgrower RSPO compliance? Yes No No

Do the smallholders have legally protected customary or leasehold usage rights to the land (independent of any involvement by the mill)?

No-'check' Yes Yes

Does the mill fully acknowledge the customary rights of smallholder landowners? Yes Yes Yes

Are the smallholders fundamentally ‘Independent’ in terms of their rights of choice? No Yes Yes

Are the credit systems available to smallholders on a secured basis? Yes No No


Thematic grouping: SMALLHOLDER SUPPORT SERVICES Smallholder TypeCharacteristic Scheme ASSOCIATED IndependentDoes the mill, either through Government or some other parallel process, make provision for full and complete technical support to smallholders? And…

Yes Yes No

…is this technical support limited to influencing (as opposed to enforcing) compliance through education and awareness? No Yes n/a

Is a 'scheme' or project manager responsible for compliance? Yes Yes No

A definition for PNG ‘Associated’ smallholders:A definition for PNG ‘Associated’ smallholders:

Associated smallholders Associated smallholders retain legal authority over their retain legal authority over their land and farming systems choice without any mandatory land and farming systems choice without any mandatory or contractual obligations to the mill. In most cases the or contractual obligations to the mill. In most cases the milling company represents the only available FFB milling company represents the only available FFB market. The milling company and the statutory market. The milling company and the statutory extension service have a significant level of responsibility extension service have a significant level of responsibility for supporting and encouraging the smallholders in for supporting and encouraging the smallholders in being able to meet RSPO requirements. Credit from being able to meet RSPO requirements. Credit from financial institutions and milling companies is unsecured financial institutions and milling companies is unsecured and land cannot be forfeited for default on repayment and land cannot be forfeited for default on repayment or other non-complianceor other non-compliance

Guidance for PNG ‘Associated’ smallholders:Guidance for PNG ‘Associated’ smallholders:

Using the generic guidance for ‘scheme smallholder’ as a Using the generic guidance for ‘scheme smallholder’ as a template, the guidance for PNG Associated smallholder has a high template, the guidance for PNG Associated smallholder has a high degree of correlation with that for scheme smallholders (>90%); degree of correlation with that for scheme smallholders (>90%); but with the following key differences (outside of normal NI but with the following key differences (outside of normal NI variance):variance):

• Project Managers cannot ensure, enforce or manage Project Managers cannot ensure, enforce or manage compliance [e.g. 4.1, 4.4, 5.3, 7.7] but should show evidence compliance [e.g. 4.1, 4.4, 5.3, 7.7] but should show evidence of provision of awareness, training and active support of provision of awareness, training and active support towards compliance (including monitoring of compliance)towards compliance (including monitoring of compliance)

• Project Managers cannot control but can actively discourage Project Managers cannot control but can actively discourage [e.g. 4.6, 5.2][e.g. 4.6, 5.2]

Guidance for PNG ‘Associated’ smallholders:Guidance for PNG ‘Associated’ smallholders:

So why not just accept scheme guidance?So why not just accept scheme guidance?•PNG smallholders are fundamentally independent in terms PNG smallholders are fundamentally independent in terms of their rights of choice with no mandated or contractual of their rights of choice with no mandated or contractual obligations to the mill or any other bodyobligations to the mill or any other body•Ensuring, or enforcing, compliance would need the threat Ensuring, or enforcing, compliance would need the threat of excluding smallholders from their only (currently) of excluding smallholders from their only (currently) available FFB marketavailable FFB market•The PNG NIWG holds the view that exclusion of The PNG NIWG holds the view that exclusion of smallholders from their only available FFB market must not smallholders from their only available FFB market must not be used as a means of enforcing RSPO conditionality; to do be used as a means of enforcing RSPO conditionality; to do so would negatively impact livelihoods and would drive so would negatively impact livelihoods and would drive many to a situation of povertymany to a situation of poverty

Back to the human development context:Back to the human development context:

• PNG’s smallholders have a long way to go to reach the PNG’s smallholders have a long way to go to reach the levels of self-reliance and farming mindset that exists in levels of self-reliance and farming mindset that exists in most of the world’s palm oil producing areas most of the world’s palm oil producing areas

• This fact needs to be considered when applying This fact needs to be considered when applying conditionalities upon countries and communities with conditionalities upon countries and communities with little exposure to education, and where illiteracy and little exposure to education, and where illiteracy and innumeracy are barriers to developmentinnumeracy are barriers to development

HIV/AIDS is a critical and overriding HIV/AIDS is a critical and overriding sustainability issuessustainability issues

Thank youThank you

Documents

Smallholder Definitions - PNG National Interpretation Working Group RSPO TFS Meeting - 1 November 2009