THE STRATEGIC ROLES AND IMPORTANCE OF OIL PALM SMALLHOLDERS IN MAINTAINING A SUSTAINABLE PALM OIL SUPPLY

Abstract

The worldwide palm oil sector faces growing demands to adhere to sustainability standards, particularly in addressing environmental, economic, and social challenges. Within this shifting landscape, small-scale oil palm growers hold a crucial but frequently overlooked position in maintaining the stability and sustainability of palm oil supply systems. This research seeks to investigate and assess their strategic contribution and relevance in the governance of sustainable palm oil. A qualitative literature review method was employed to synthesize findings from approximately 80 peer-reviewed journal articles, policy reports, and institutional documents published over the past two decades. Data collection was conducted through purposive sampling of academic databases such as Scopus, Web of Science, and Google Scholar using relevant keywords. The data were analyzed through thematic content analysis to identify recurring patterns, gaps, and implications related to smallholder practices. The results reveal that smallholders contribute up to 40–45% of Indonesia’s oil palm plantation area and play a significant role in rural livelihoods. However, they face multiple barriers such as limited access to sustainability certification, insecure land tenure, low adoption of best agricultural practices, and limited institutional support. Despite these challenges, smallholders hold substantial potential to advance sustainable palm oil if empowered with technical, financial, and policy interventions. In conclusion, enhancing the strategic engagement of smallholders is essential for achieving long-term sustainability in the palm oil sector. Future research should focus on context-specific policy designs, inclusive financing mechanisms, and gender-responsive approaches to strengthen smallholder integration into sustainable supply chains.