The oil palm industry in India is based on a public-private partnership (PPP) model, involving over 99 per cent of farmers, smallholders (SH), processing companies (millers) and the government. Farmers have a direct relationship with mills resulting in bargaining power but this is not the case in other parts of oil palm-growing countries.

Palm oil millers in India are in a position to trace the source of each individual FFB (fresh fruit bunch) from SH, resulting to achieve traceability in the supply chain but millers, on the other hand, in Malaysia are still unable to trace the source of individual FFB from SH.

Freedom of association and collective bargaining 

SH and workers, without distinction, have the right to join or form trade unions or worker committees. There is a transparent and equitable mechanism in place for agreements in prices and price settings for the raw materials (FFB) supplied by them to the mills, where the government is involved in the process. There is no discrimination in hiring and employment practices, and equal treatment and no harassment of workers and their families are guaranteed. 

Environmental aspects 

India is the largest groundwater user and consumes around 4 per cent of total water resources, as per a World Bank report. In terms of the important water ecosystem, it is found in oil palm-growing States in India that adequate buffer zones are provided, largely driven by the government, for both lakes and major rivers and there is no link to oil palm farms.

Scientific approaches like drip and micro irrigation practices - by the government are being adopted largely in the field of oil palm across various States in India to ensure and monitor effective utilisation of groundwater resources and improve crop productivity as well. 

The SH farmers often lack the knowledge and skills to adopt better environmental and social practices and implement the system of production control required by companies with responsible sourcing of commitment. Companies should develop awareness with the object to generate a commitment to better practice, supporting the implementation of those commitments in practice and working with the wider community to increase positive impact. Therefore, companies should look for ways to support SH inclusion more vigorously. 

At present, bio-mass utilisation by palm oil mills in India is limited. Malaysia and Indonesia have developed value-added products through their in-house R&D, out of bio-mass and also through the utilisation of this bio-mass in various forms in their plantation estate, improving their crop productivity.  The abundance availability of bio-mass in the mill should be converted to value-added products in India through R&D, which, in turn, will help to generate additional revenue for the mills.

Learning from other parts of the oil palm-growing world may be another approach through government-to-government dialogue, for which the Government of India should take initiative to engage closely with Malaysia and Indonesia with which we have a long trading relationship. 

Industry must build robust research capability to track the need and want of SH farmers, market dynamics and drivers. This will enable millers to manage their profit margins. 

(The Author is Former CEO-Oil Palm Plantation, Godrej Agrovet Ltd., Views expressed are personal)