Palm oil suffers from a bad reputation. Monoculture of palm is associated with deforestation and the collapse of biodiversity. Indeed, huge areas have been planted with monoculture of palm trees to meet the growing demand from the food, cosmetic and other industries all over the world. Sumatra island is a major spot for palm oil with large plantations but also a huge number of smallholders and independent producers, and a complex infrastructure of mills and refineries.
To better understand the palm issues, the social component should not be under estimated: millions of rural households have very significantly increased their income thanks to a commodity that is harvested all year long and benefited so far from rather stable prices and a secured market. Protection of the remaining forests and sustainable palm production have to be handled in an integrated approach to ensure long lasting impact on ecosystems and local livelihoods.
Major Brands and Livelihoods team up for sustainable palm production
In 2021, Danone, Mars, L’Oréal and L’Occitane Group joined forces with Livelihoods to develop an unprecedented initiative to help 2,500 smallholder farmers achieve a sustainable transition for palm oil in Sumatra island.
Brought together by the Livelihoods Fund for Family Farming (L3F) which serves as the project integrator, the project has set an ambitious goal to build a transparent and deforestation-free supply chain thanks to three main, locally adapted components: agroforestry models, regenerative agriculture and biodiversity enhancement.
The project is locally implemented by Musim Mas, a major Indonesian palm oil producer and supplier to Mars and Danone, and SNV (entrusted project implementer working closely with palm oil smallholders). In total, the project is helping regenerate 4,000 hectares of palm farms in degrading land areas, while restoring/protecting an additional 8,000 hectares of local biodiversity over 10 years.
From theory to practice: the transformative evidence of the transition, 3 years later
Three years after its launch, the project aimed at fostering low carbon agriculture on palm and agroforestry practices in Labuhan Batu, North Sumatra, has yielded remarkable results. During a mid-June 2024 visit to the area, which brough together all partners of the project, the tangible benefits of these practices on smallholder palm oil plantations were clear.
To date, the project has successfully achieved RSPO certification for 800 independent smallholders and expanded the landscape coalition to encompass 8,000 hectares of protected state forest. This expansion aims to prevent illegal logging, encroachment, and unauthorized land conversion via community-based conservation management with support from the People Resources & Conservation Foundation (PRCF).
Participant palm oil farmers have received extensive training and individual coaching over the past three years, thanks to a close partnership with the dedicated brands and Livelihoods teams, and engaged in peer exchange to disseminate the learnings. Trainings, have focused on Best Management Practices on Regenerative Agriculture, Agroforestry, Institutional and Business Development, and Financial Literacy and were jointly performed by SNV, Musim Mas and ICRAF (International Centre for Research in Agroforestry).
This intensive and proximity coaching within communities has led to a significant rise in the adoption of sustainable agricultural practices, increasing from 20% to between 50% and 90% over three years. Notable improvements in soil fertility have been observed, alongside farmers’ growing enthusiasm for using affordable organic compost produced by the project. Implemented both at community and farm levels, this compost enhances soil quality and crop yield while strongly reducing dependence on increasingly costly chemical fertilizers.
Empowering women and men farmers
Moreover, the project has empowered farmers by organizing them into robust associations. This has enhanced their organizational and business capacities, ensuring the sustainability of ;low carbon practices and promoting long-term success. In particular, the financial literacy courses have served as a powerful tool for empowering women involved in the project. By equipping them with essential financial skills and knowledge, these courses enable women to manage their resources more effectively, make informed decisions, and strengthen their economic independence.
Our call to action for new partners to join the project!
Currently working with 2,500 independent smallholder farmers, the project has demonstrated success, and we have a solid economic model focused on improving soil practices. We ambition to scale up by increasing our number of farmer participants to 5,000 and paving the way towards a 100% green supply chain while maintaining compliance with RSPO standards and producer transformation. To support this growth, we are inviting other brands—beyond our current coalition of Danone, Mars, L’Oréal, and L’Occitane—that are genuinely committed to sustainable value chain transformations to join us.
Enhancing biodiversity and ecosystem restoration
In addition to expanding production, the project aims at restoring degraded watershed ecosystems along riverbanks. We are seeking funding partners to support the restoration of areas where palm oil planting is prohibited, a key effort to ensure the local, rich-in biodiversity ecosystems are thriving, whilst rehabilitating buffer zones via agroforestry systems which would provide complementary revenues to smallholders.