Sustainable certification schemes have surged in recent years. The introduction of these schemes poses serious challenges to smallholders. One such certification scheme is the Roundtable on Sustainable Palm Oil (RSPO), which uses certification to increase equitable and sustainable production of palm oil. This study calculates upfront and recurrent costs and monetary benefits of RSPO certification for the Amanah Independent Oil Palm Smallholders Association in Ukui District, Indonesia. Survey and interview data was collected between 2013 and 2015. Results show that upfront costs of certification were 86 euro per hectare. Furthermore, despite generating up to 21% higher revenues from sales, certification created up to an 8% loss of net income per hectare on average per smallholder in the first year after certification, compared to the situation prior to certification. To motivate smallholders for RSPO certification, the economic performance of certified oil palm smallholders should be improved. This can result from further yield increases, a guaranteed premium price or the sales of GreenPalm certificates to provide additional income.

Certification becomes a prerequisite for tradable products to get legality and access to global market. Each tradable product can choose certificate according to its market destination. However, the application of certification standards are very low in both international (RSPO and ISCC) and domestic (ISPO) standards. This study was focused on the ISPO certification. How large is the gap between current practices and ISPO standard? What are factors that affect adoption of ISPO certification? Does ISPO deliver more access to market for oil palm smallholders? Do smallholders have adequate capacity to meet ISPO standard? These questions have been assessed and discussed in this paper to find answer and alternative way out for smallholders to meet the ISPO standard. The objective of this study is to assess capacity and willingness of oil palm independent smallholders to meet the standard of ISPO certification. This study was conducted in Pelalawan District, Riau Province using a survey method. The result shows that a number of barriers are faced by smallholders to obtain ISPO certification while the opportunity to get better access to local and global market is still uncertain. The adoption of ISPO certificate was influenced by farmers' knowledge on agricultural practices, business legality, household income, and land-size. Keywords

Indonesia is the world’s largest producer of palm oil, and its smallholder oil palm plantations involve more than 2.3 million farmers. The rapid expansion of the oil palm area, and resulting negative environmental and social impacts, has increased the demand for sustainability certification for palm oil products. This study investigates whether different types of smallholders face different barriers in complying with certification standards. The study uses survey data from 829 smallholders in Riau, Sumatra. First, an assessment is made of the gap between current management practices and practices required by Roundtable on Sustainable Palm Oil standards for different types of smallholders. Second, the article explores explanations for the gap between current and required practices. Finally, an investigation is made of the different starting points of different types of smallholders. Results indicate that the diversity between smallholders affects their prospects for certification. To date, this diversity in smallholders has not been taken into account in the application of Roundtable on Sustainable Palm Oil standards. This can help to explain the limited success of smallholder certifications in Indonesia.