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Report on the webinar



On December 7, Solidaridad Japan hosted a webinar on "Oil Palm Cultivation from the Perspective of Soil Health".


Since this session focused on soil and farming methods, there were concerns that it might be difficult to follow without prior knowledge of the subject. However, the results of the questionnaire showed that the audience seemed satisfied with Dr. Kazumichi Fujii's soft and easy-to-understand presentation.


I felt that even those of us working in the field of humanities, including myself, need to consciously update our science knowledge up to high school. This will also train our eyes to look at initiatives to solve social and environmental issues.


Each presentation was excellent. In addition, even though all the speakers met online for the first time, the frank exchange of opinions was highly fruitful. The Country Directors General of Solidaridad Malaysia and Indonesia appreciated Dr. Fujii's research findings from field experience. At the same time, they responded to questions from Dr. Fujii referring to policies and data in their respective countries.



The recordings of this webinar are available at:


Simultaneous interpretation was used on the day, but the recordings are available only with the original audio. A summary of the speeches is provided below to assist with viewing.



【Opening remarks】

Hiroshi Sato Kan, Co-Chairman of Solidaridad Japan


The main concern for palm oil producers, especially smallholders, is the sustainability of their production and livelihoods. When considering the sustainability of palm oil, it is necessary to ensure the sustainability of the entire industry ecosystem, including farmers and production sites, not only through certification and traceability mechanisms. As soil management is essential for the sustainability of production sites, this webinar will provide a keynote speech on basic soil knowledge, issues surrounding soil in oil palm production areas, and attempts to implement sustainable use practices. The country directors of Solidaridad Malaysia and Indonesia will then present practical examples of how they provide support to farmers.



Keynote Speech: Soil health and sustainability of oil palm plantation

 Dr Kazumichi FUJII

Senior Researcher, Forestry and Forest Products Research Institute

≪Why is soil important?≫

  • There is a linkage between palm oil prices and deforestation rates. Plantation expansion has slowed since 2007 due to lower palm oil prices. The rate of deforestation has also slowed, but depending on price trends, this may not be a relief.

  • To meet the increasing demand for palm oil and achieve sustainability, existing fields must be used sustainably and with increased yields rather than being cleared to make room for new, more productive land. The soils in oil palm growing areas in Indonesia and Malaysia are not fertile. They can quickly become wastelands if used improperly, so it is necessary to consider the aboveground and underground areas.


≪What is soil?≫

  • Soil is made of sand and clay from the decay of rocks, mixed with humus from fallen leaves and other plants. It takes 100 to 1000 years for a 1 cm thick soil to form from rock. While soil generation takes too long, it takes only 1 cm in 10 years to be depleted by agricultural use, which is the root of the problem.

  • Soil health is determined by the balance of chemical elements (degree of acidity, elements and compounds contained), physical elements (grain structure, moisture, etc.), and biological elements (earthworms and microbes). Soil begins to deteriorate with agriculture, but it recovers with fallow. However, if the soil is used to its maximum extent, it may not be able to regenerate even after fallow, so soil management is necessary for sustainable use.

  • Factors that determine soil characteristics are (1) the time it takes for soil to form from rock, (2) organisms, (3) topography, (4) rocks and volcanic ash as parent material, and (5) climate (temperature and rainfall). According to the USDA classification, the world's soil can be divided into 12 types. The most common in the tropics are "Oxisol" or "Ultisol” and "Histosol (Peat)" in swampy areas.


≪Issues to be solved≫

  • Oil palm grows in Ultisol and peat soil, where paddy rice cannot grow, but both are prone to acidification. Excessive nitrogen fertilizer use leads to soil acidification and emits N2O (nitrous oxide, a greenhouse effect 30 times more potent than carbon). Only a portion of nitrogen fertilizer is absorbed by plants, so appropriate fertilization is essential from a cost perspective.

  • To supplement the nutrients lost in oil palm cultivation, inputs such as synthetic fertilizers are necessary. When I calculated the economic balance, the profit was about US$2,500 per hectare. However, due to the recent sharp rise in the price of chemical fertilizers (doubled) and the decline in palm oil prices, the break-even is estimated to be close to zero. Small farmers are more vulnerable to price fluctuations.

  • The oil palm plantation I observed had excessive nitrogen inputs. Farmers are wasting money on fertilizer, which is bad for the soil. Nitrogen inputs can be reduced further.

  • The infiltration of the topsoil and the subsoil's water retention capacity determines the soil quality. Oil palm cultivation depletes the soil's organic matter, deteriorating infiltration and reducing the water retention capacity of the subsoil.

≪My trial≫

  • Degraded soils can be regenerated using fallow vegetation (such as Imperata, which is high in potassium).

  • Termites are effective in improving soil infiltration.

  • Diversification of microorganisms helps reduce pathogens.

  • No-till or reduced tillage has the potential for clump formation, erosion prevention, moisture retention, and carbon storage.



【Presentation 2: Regenerative Agriculture Guidance in Solidaridad-1】

Dr Law Chu Chien, Country Director, Malaysia


≪Issues in palm oil production in Malaysia≫

  • Solidaridad started its activities in Malaysia in 2019, with a staff of about 25 people working on activities related to palm oil.

  • Demand for palm oil will continue to increase, so we need to increase yield per unit area, not per acre of farmland. In Sarawak, we can double it.

  • According to data collected in our activity sites, yields of small farmers are lower than those of large, well-managed farms. Perak and Johor on the peninsula are 15-18 tons/ha, and Sarawak and Sabah in Borneo are 11-13 tons/ha; therefore, yields can be doubled with appropriate farming technology.

  • In Sarawak, a high percentage of "Good Agricultural Practices (GAP) such as road construction and terrace building is implemented. However, vegetable cultivation as a cover crop, using pruned leaves for soil cover, and using organic fertilizers are not well practised.

≪Solidaridad activities in Sarawak≫

  • Technical guidance in Sarawak: Conducted through farmers' training, farm demonstration plots, and monitoring and evaluation.

  • Key intervention areas:

    • Field management (plant physiology, plantation management, pest control, MSPO, importance of access to qualified and licensed seedlings, pruning, full fruit bunch grading)

    • Soil fertility management (cover cropping, use of organic fertilizer, soil analysis)

    • Nutrient management (correct nutrient and fertilizer application: right time, right amount, right frequency, proper method.)  In particular, too much nitrogen can lead to eutrophication of water quality because it is easily carried away by water. This control is of utmost importance because excessive nitrogen leads to economic losses for farmers and environmental impacts.

    • Water management(rainwater harvesting, drainage system, protection of buffer zone)

    • Data recording

    • Financial literacy

    • Safety and health

    • Biodiversity


  • Results:500 smallholders or 2000ha of land were regenagri-certified by 2022. This has raised awareness among farmers. Solidaridad will further strengthen the program through monitoring and evaluation.


  • Challenges and difficulties:

    • Lack of awareness on the importance of regeneagri practices and sustainable good agricultural practices among smallholders

    • Smallholders will take some time for transition from conventional to regeneagri practices and are more receptive when they see the success of smallholders.

    • Law financial capacity

    • Labor shortage


≪Explanation of photos≫

  • Training

  • Regenagri audit

  • Regenagri practice


≪Conclusion≫

  • Support from businesses is critical. Small farmers are vulnerable but have the potential to double their yields without expanding their farms. There is potential to increase production by 30-50% without deforestation to meet global demand.


【Presentation 2: Regenerative Agriculture Guidance in Solidaridad-2】

Ms Yeni Fitriyanti, Country Director, Indonesia


  • Solidaridad Indonesia was established and became active as a local foundation in 2015.

  • We are mainly working in Kalimantan on palm oil. Other projects are tea in Java, palm oil in Lampung, Sumatra, and previously assisted farmers in Jambi to obtain RSPO.

  • We have assisted independent and ex-plasma farmers (under the corporate umbrella) in organizing and have assisted about 20,000.

  • We conduct a baseline assessment to diagnose what livelihood options are available as well as the potential of the land and commodities.

  • In addition to capacity building for oil palm production, we provide financial literacy education. Their wives are taking the course to use the money to pay for education and insurance for their families.

  • Group support: farmer cooperatives have been formed to strengthen the groups' capacity and disseminate agricultural technology. Technical guidance is provided through the ISPO process of national certification, which is mandatory to obtain, along with the market and private sector.

  • Digital tools (apps): data on farmland area, production, number and location of small farmers supported by Solidaridad is registered and currently covers 30,000 ha.

  • Farmers certified with the support of Solidaridad: 800 RSPO certified, 164 ISPO certified, and 2000 regenagri certified.

  • Farmers are encouraged to grow crops other than oil palm.

  • Raise awareness to meet the market's demanding standards through increased production and environmentally friendly agriculture.

  • They also tell small farmers they need certifications such as ISPO, RSPO, or Regenerative Agriculture to participate in the global supply chain.

  • Solidaridad conducts mapping to respond to the EUDR, using GIS to locate small farmers' farmland and the nearest oil mill to determine where small farmers sell their oil palm fruit bunches.

  • Solidaridad also works with local governments. In West Kalimantan, we have MOUs with the heads of seven administrative regions; in East Kalimantan, we have MOUs with two provinces and four districts.

  • Provides technical guidance on agriculture, land mapping, GIS training, instruction on how to make compost, and support for composting activities by cooperatives.

  • Working with other donors (UNDP) and private companies (Henkel, Bassup, Estée Lauder).

  • The photo shows regenerative agriculture in the village of Malalai, West Kalimantan.

  • Oil palm alone grows other vegetables and fruits. They help maintain soil health and feed their families.

  • We also have a gender project, which includes informing people about wearing protective clothing when farming and the knowledge of how to avoid contamination of pesticides and other chemicals when doing household chores after farming.

  • We would like you to consider not only the sustainability of palm oil itself but also the sustainability of small farmers' livelihoods behind the giant palm oil industry.


【Discussion】

Yoshida: First, I would like to invite comments, questions or additions to each other's speeches.


Lao: Fujii's research aligns with what we see in the field. These are the core of what Solidaridad is training farmers to do. We will continue to make efforts to minimize environmental impacts.


(Supplemental Information)

The Malaysian government has set a limit of 6.5 million hectares for oil palm plantations. This has reduced deforestation. Small-scale farmers' oil palm plantations are not being converted from forests but from rubber, coconuts, and rice. Only 4.6% of the farmers we support have cleared forests and turned them into oil palm plantations. The largest number were planted in the 1990s, and the most recent in 2006. Regulations regarding conversion are very strict these days.


Fujii: In Brazil, there is a rule to maintain 20% of forests as forests even when developed, but how is the rule based on the criteria in Malaysia?


Lao: In Malaysia, there is no such standard except for large plantations; HCVs (high conservation value forests) are supposed to be protected. Also, the government has issued a policy to maintain at least 50% of the country's land as forest in the 2021 forestry policy. Currently, it is about 52.8-53% (in the country as a whole), so it may still be developed a little, but there will be no conversion from forests to oil palm orchards. The 50% area currently conserved as forest cannot be sold. In addition to this, MSPO 2.0 does not allow the conversion of forests to oil palm plantations after December 31, 2019.


Fujii: To avoid a price collapse, I believe that not overproducing oil palm is one way to manage the industry sustainably.


Law: Palm oil can be used in a wide variety of ways. It is used in toothpaste, cosmetics, food processing, and biodiesel fuel. The current price in Malaysia is most affected by the price of petroleum products and is also affected by the price of sunflower oil, olive oil, and soybean oil. Malaysia has introduced biodiesel (B20) with 20% palm oil blending. Indonesia has already introduced 30% biodiesel (B30) and is also considering it an aviation fuel. While methods to raise the price can be taken, it is also essential to be affordable for food security. Palm oil is a high-quality edible oil that can withstand high temperatures. At the moment, the demand for palm oil is only increasing, so there has not been much discussion about the price due to the balance of supply and demand. The price issue is within the context of the price of petroleum products and the price the general public can afford to purchase them.


Yeni: It was very informative. The content of Mr. Fujii's lecture will strengthen our knowledge. I would like to consider adding it to our instructional modules for farmers.


Fujii: I am interested in researching how corporate plantations can increase yields efficiently and how agroforestry by small farmers can help improve the soil. The home garden in the video you just showed us also needs to track data on how the soil changes and prove the value of what you are doing with data and numbers. Right now, regenerative agriculture has several certifications, but there is a mix of different values, and they are probably in the monitoring stage. It is essential to show how much economic value soil improvement and conservation have to raise social awareness.


Yoshida: It was interesting to see the depth of the discussion. I listened with the hope that this would lead to actual partnerships. Next, I would like you to discuss sustainability from your respective standpoints.


Fujii: The capital will be relocated from Jakarta to Nusantara in East Kalimantan next year. Construction is progressing at a rapid pace. As a soil researcher, I am shocked to see how the construction is being carried out: mountains are being cut down, and soil is being poured down. But that is the way Japan used to be. As the economy has developed, we finally came to recognize the importance of the soil as well. Although we can only say this because of the prosperity of our livelihood, I believe that the rainforest has many resources for the sustainable development of Indonesia. It would be nice to have guidelines on how much rainforest to preserve so that we don't regret it. Oil palm, eucalyptus, and dragon fruit can grow in poor soil (where other plants cannot grow), but I fear that nothing will grow (because the soil is too degraded) if we are not careful.


Lao: Most Malaysian soil is Ultisol and Oxisol. The government heavily subsidizes fertilisers for rice and coconut production, but the price of Malaysian rice is higher than that of rice imported from Thailand. Durian cultivation, which fetches a high price, is gaining popularity, but it takes 10 years to harvest and is vulnerable to flooding. It should also be recognized that oil palm is a safe crop for farmers.


Back to sustainability demands outside the country, such as the EUDR (EU Deforestation Regulation). Solidaridad aims to raise the floor for producers rather than raise the bar for them; we are working closely with the EUDR, the EU Commission, and the CPOPC (Council of Oil Palm Producing Countries) to pursue a sustainability agenda, but on a path that does not leave farmers vulnerable.


Small farmers have only a 6.1% share of the economic value generated by the entire palm oil value chain, while retailers and manufacturers of daily consumer goods account for a large share. Compared with each subsector's profits, small farmers' share is almost 0%. This is exactly what Fujii said. All stakeholders should share the burden for sustainability in the supply chain. In our experience, 90% of the farmers want to change to environmentally friendly and sustainable agriculture, but they need guidance and support. The indigenous people need texts in their language (Dayak, Iban, Dayu), not English, for guidance, but they need funding and support.


OVERVIEW PROFITABILITY IN THE PALM OIL VALUE CHAIN


Solidaridad "Palm oil Barometer 2022" pp.26-27

Source:Rijk, G., Wiggs, C. and Piotrowski, M. (2021). FMCGs, Retail Earn 66% of Gross Profits in Palm Oil Value Chain. Chain Reaction Research.


Eddy: Many companies have had sustainability policies in place since 2000.

Since 2007, they have had a responsible sourcing policy, which means that not only their own farms but also their suppliers, small farmers, must comply with global standards. Solidaridad provides capacity-building support for traceability. We also support organic fertilizer production from fruit bunches and other activities. Companies need these activities, and cooperation is already underway.


Yoshida: Please give us one last message.


Fujii: Thank you all for your time today.


Law: Again, industry support is very important. If you have the opportunity to come to Malaysia or Indonesia, please contact us, and we will gladly connect you to the actual sites where we are working and provide you with the necessary information.


Yeni: Thank you for this opportunity. I hope you can see that behind this giant industry, small farmers are struggling daily toward sustainability, not only because of capacity issues but also because of regulations and other influences. The information given by Dr. Fujii will be incorporated into the training module. Finally, palm oil is healthy, and 90% of households in Indonesia use it for cooking. Your support is needed. Thank you very much.


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