Is certification an effective tool to improve smallholdings’ performance?

Department of Agribusiness, Faculty of Agriculture, Universitas Sumatera Utara, Jl. Dr. Mansur No. 9, Medan, Indonesia, 20155

^* Corresponding author: diana3@usu.ac.id

Abstract

Oil palm smallholders have rapidly grown but their performance is relatively low compared to other producer groups. One of the programs that are expected to address this is certification. However, only a small percentage of smallholders received the certification in practice. This study was conducted to analyze the effectiveness of certification to improve smallholder oil palm plantations’ performance. The study was conducted in North Sumatra, South Sumatra, and Riau. Data were collected from 707 sample smallholders. Performance is measured from economic aspects, namely productivity, selling prices, fertilizer usage and harvest criteria, and environmental aspects, namely waste treatment and paraquat pesticide usage. The data were then analyzed using the One-Way ANOVA test and the One-Sample t-test. The results show significant differences in productivity and selling prices between the plasma and other smallholder groups, but not between the certified and non-certified ones. The results also show significant differences in the waste treatment between the certified and non-certified groups, but not in paraquat pesticides. Therefore, it can be concluded that certification cannot improve smallholder oil palm plantations’ performance if not followed by intensive and sustainable partnership assistance.