Strengthening social inclusion within oil palm contract farming in the Brazilian Amazon.
Abstract
Drawing on key informant interviews and surveys with participants and non-participants of oil palm contract farming schemes in Brazil's largest oil palm producing state, Pará, this brief offers insights into the extent to which the opportunities and risks of contract farming play out, in the case of the Sustainable Palm Oil Production Program (SPOPP). It is revealed that the SPOPP cannot be considered an inclusive development programme in its current format as land- and labour-constrained households are more likely to be excluded from contract farming under this programme than other households. Viable options to strengthen inclusivity within the programme include permitting smallholders to develop smaller plantations, promoting intercropping and reducing barriers that currently prevent smallholders under the scheme from engaging external labourers. Despite civil society concerns that contract farming could result in smallholders abandoning staple food crop production to focus only on oil palm, there is no evidence to date that contract farming under the SPOPP scheme has exacerbated smallholder food insecurity. Results also suggest that the majority of smallholders involved in the scheme have been unable to meet the performance expectations of oil palm companies. To increase the likelihood of success amongst the 12% of smallholders at highest risk of credit default, it is suggested that additional support should be provided, for example in the form of targeted capacity-building initiatives or enabling management outsourcing arrangements where successful smallholders take over plantation management through production sharing arrangements.