CHANNAHON, ILL. — IOI Loders Croklaan and the Kerry Group are part of a three-year support program that involves small farms in Malaysia and aims to bring about more sustainably produced palm oil. The program is designed to help palm growers who have a farm size between 0 to 500 hectares (1,236 acres) implement sustainable agricultural practices.
Smallholders ultimately provide about 40% of the world’s palm oil production, according to IOI Loders Croklaan.
“If you look at the palm oil yield, there are still large variances between the yield of smallholders and big plantation companies,” said Ben Vreeburg, sustainability director at Channahon-based IOI Loders Croklaan. “You could increase F.F.B. (fresh fruit bunch) production up to 50% without any new developments if you increase the current yield of smallholders. Helping smallholders to get good sustainable manufacturing practices in place will increase their productivity and further lift them out of poverty.”
Wild Asia, another partner, will implement the program that will be managed by both Kerry Group and IOI Loders Croklaan. Wild Asia, Kuala Lumpur, Malaysia, works with consumers, businesses and traders on how they may leave a positive footprint on the developing world.
The program also will guide third-party mills who supply IOI Loders Croklaan in achieving compliance to IOI Loders Croklaan’s sustainable palm policy and in preparing for certification requirements. The program will begin with one mill, Fortuna Palm Oil Mill in Sabah, a state in Malaysia.
“We have a few potential participating non-R.S.P.O. (Roundtable on Sustainable Palm Oil) certified mills in the Telupid, Beluran and Kinabatangan landscape (Sabah) with approximately 5,000 smallholders and small growers,” Mr. Vreeburg said. “We start with one mill, Fortuna, and will increase the number throughout the duration of the program.”
The program will help Kerry Group, Tralee, Ireland, work more collaboratively with its suppliers.
“As a buyer of palm oil, we have limited interaction with mills or palm growers,” said Maarten Butselaar, responsible sourcing manager for the Kerry Group. “So we rely on our supply partners to help meet our sourcing commitments. This partnership gives us a more direct influence on practices at mill and farm level in the project area. Alongside our broader requirements for palm oil, the program aims to deliver a positive impact for communities and workers within our supply chain.”