Stories: Smallholders

Why Smallholders Are Central to Sustainable Palm Oil Supply Chains

Ian Suwarganda leads Golden Agri-Resources’ (GAR’s) efforts to strengthen responsible palm oil supply chains, with a focus on traceability, responsible sourcing, and supplier engagement. His work centres on translating sustainability commitments into practical actions across GAR’s global supply base, while helping the company and its partners navigate evolving international requirements such as the EU Deforestation Regulation (EUDR).

A key priority in his work is ensuring that smallholders remain part of sustainable palm oil supply chains. Through partnerships, capacity-building programmes, and collaborative initiatives, Ian’s teams support efforts to help independent smallholders meet sustainability standards while improving their livelihoods, ensuring that progress towards deforestation-free supply chains is both effective and inclusive.

Q1: Why does GAR invest in supporting smallholders?

We invest in supporting smallholders because their success is fundamental to the sustainability of the palm oil sector and our supply chain. In Indonesia, smallholders manage around 40–45% of the total oil palm plantation area, yet there remains a significant productivity gap between smallholder farms and company-managed estates. Closing this gap is important to ensure that farmers can improve their livelihoods while the sector reaches its full production potential, with the added benefit of enhancing livelihoods and profitability for independent farmers.

This is also essential for our business. Both our mills and those of our suppliers depend heavily on Fresh Fruit Bunches (FFB) produced by smallholders, and some mills rely almost entirely on smallholder supply. By providing access to replanting programmes, training, better agronomic practices, and quality seedlings, we help farmers improve productivity and fruit quality, ensuring a more sustainable and resilient supply chain for the long term.

Q2: What impact does supporting smallholders create, for both smallholders and GAR’s supply chain?

Supporting smallholders creates value both for farmers and for the integrity of our supply chain. For farmers, capacity building, training and stronger farmer organisations can help improve productivity, farming practices, and access to stable markets.

Many palm oil supply chains are complex and involve multiple intermediaries, which can make traceability challenging. By mapping, engaging, and working directly with smallholders, through training, data collection, and group-based approaches, GAR is able to strengthen traceability to the plantation level while ensuring that farmers remain connected to stable markets.

Over the past 1.5 years, we have mapped 25,920 smallholder farmers and more than 94,000 plantation plots across 469 villages in 118 districts. This mapping is a foundational step that allows us to better understand farmers’ needs, improve supply chain transparency, and support smallholders in progressing towards recognised sustainability standards and certification. These efforts are also aligned with GAR’s Collective for Impact, which includes a commitment to training 100,000 smallholders by 2035 to help build more productive, resilient and sustainable palm oil supply chains.

Q3: How is GAR supporting smallholders on the ground through the Sawit Terampil programme?

Collective for Impact recognises that sustainability challenges cannot be solved by a single actor alone. Through the Sawit Terampil programme, GAR works alongside smallholders, local governments, NGOs and other partners to strengthen the responsible sourcing pillar of our sustainability framework. The programme demonstrates how shared responsibility can translate into practical action on the ground, supporting more inclusive and deforestation-free supply chains.

A key objective of Sawit Terampil is to help smallholders grow from individual farmers who rely on company support into stronger, self-organised farmer groups. Through associations such as PESAT (Petani Sawit Terampil), farmers can organise themselves, share experiences, and train one another through peer-to-peer learning. Over time, this approach not only strengthens their partnership with GAR but also empowers smallholders to take greater ownership of their journey towards sustainable and productive farming.

Q4: How does supporting smallholders help to meet new regulations like the EU Deforestation Regulation (EUDR)?

Smallholders play an important role in global palm oil supply chains, but new regulations such as the EU Deforestation Regulation (EUDR) require higher levels of traceability and proof that commodities are produced without deforestation. For many smallholders, meeting these requirements can be challenging without the right support. Through programmes like Sawit Terampil, GAR helps address this gap by supporting smallholders with training, mapping, and improved agricultural practices, enabling stronger traceability to the plantation level while keeping smallholders connected to responsible market.

At the same time, GAR actively advocates for the recognition of smallholders in global policy discussions. Smallholders are vital to Indonesia’s palm oil sector and the global supply chain, and many operate as family-based producers rather than corporations. Regulations that unintentionally exclude them risk reducing compliant supply and undermining sustainability goals. We therefore encourage flexibility and affirmative approaches that help smallholders transition towards compliance while remaining part of sustainable global supply chain.

Q5: What message does GAR want to share with global audiences about palm oil and sustainability?

Palm oil is one of the most efficient vegetable oils in the world and plays an important role in supporting food systems and rural livelihoods. The key challenge is how it can produced responsibly and inclusively. Through initiatives such as Sawit Terampil and Collective for Impact, we aim to demonstrate that sustainable palm oil supply chains are possible when companies, farmers, government, and partners work together. By strengthening traceability, building farmer capacity, and supporting smallholder inclusion, we hope to contribute to a palm oil sector that is both environmentally responsible and socially inclusive.

At the same time, we recognise that this journey cannot be achieved by one company alone. We invite our customers, partners, and stakeholders to work with us in supporting smallholders and building transparent, deforestation-free supply chains that benefit both people and the planet.