The Social and Economic Effects of Palm Oil Certification, with a Specific Focus on the Livelihood Effects for Farmers

This research project focuses on certification and view certification as a governance intervention logic. This intervention intends to transform conventional agricultural production toward a more sustainable agricultural production. However, the effects on smallholders are questioned, as they still confronted with problems of making a living, while they also face many limitations, such as limited access to training, access to capital and access on inputs production. Those who do not have access on assets may be marginalized from the market, which may also hamper their ability to improve their livelihood.

This project aims to contribute to our knowledge on sustainability certification; the implication of sustainability certification in smallholders and capacity to bring about sustainable change on production of the most traded vegetable oil worldwide, palm oil commodity. It is motivated by observation that little attention in impact studies of sustainability certification on smallholders is being given to a dynamic and comprehensive approach particularly regarding contextual changes such as smallholders’ characteristics, market changing, and governmental policy. Relationship between implementation of sustainability certifications and its contribution to the livelihood of smallholders and to the solving of sustainability problems under various circumstances of smallholders characteristics and structure which they embedded that this study offers a novel contribution to the literature.

This research may also provide information to decision makers of public (government) and private sustainability certifications, which relevance to be considered to improve standards and certification systems toward better improvement livelihood of smallholders and sustainable production. It also offers insight for organizations, who put a lot of concern on rural development and particularly for smallholders’ welfare, such as NGO and smallholder union, regarding relationship between certification and livelihood of smallholders. This insight, therefore, give them important knowledge to pursue further strategies in order to improve livelihood of smallholders through certification.