Limited reach of zero-deforestation commitments to Indonesian oil palm smallholders

Abstract

Many companies have adopted zero-deforestation commitments (ZDCs) to remove products linked to forest loss from their supply chains. A common concern is that such policies may lead to the supply chain exclusion of smallholder farmers. Here, in this study of the Indonesian palm oil sector, we draw on surveys with 1,541 farm households and 53 interviews with supply chain actors to assess whether and how ZDCs reach non-industrial producers, including effects on market access, prices, training and village-level deforestation. We find that access to ZDC markets depends largely on location within company sourcing areas, while active exclusion appears to be limited. Certification-based engagement reaches some tied smallholders, but ZDC awareness remains low, with weak policy dissemination, limited bottom-up traceability and almost no ZDC-focused capacity building or price differentiation for producers, especially independent smallholders. Deforestation levels in villages within the sourcing areas of ZDC firms are low but similar to patterns elsewhere. These findings highlight effectiveness and equity gaps in current ZDC approaches. Zero-deforestation commitments in the Indonesian palm oil sector have limited reach among smallholders. This study combines surveys and interviews to assess market access and deforestation, finding limited smallholder inclusion and minimal differences in forest outcomes.