RURAL DYNAMICS DIAGNOSTIC OF SMALL- HOLDERS SUPPLYING FRESH FRUIT BUNCHES (FBB) TO DESAI TALISA MILL SABAH MALAYSIA SEPTEMBRE 2016

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1 RURAL DYNAMICS DIAGNOSTIC OF SMALL- HOLDERS SUPPLYING FRESH FRUIT BUNCHES (FBB) TO DESAI TALISA MILL SABAH MALAYSIA SEPTEMBRE 2016

2 BACKGROUND 2 In February 2015, Nestlé was the first TFT member to engage in the Rurality journey to transform its supply chain at the farmer level. Kampung Baba Kampung Ansuan Kampung Buis Bidu-Bidu Protection Forest Reserve Sg. Sapi Virgin Jungle Reserve Sg. Sapi Virgin Jungle Reserve Sg. Muanad Desa Talisai Palm Oil Mill Bukit Kuamas Protection Forest Reserve Sg. Labuk Ulu Sapa Payau Virgin Jungle Reserve South China Sea MALAYSIA Ulu Muanad Smallholders Location Road River Legally Protected area SABAH km 0 2, Desa Talisai Palm Oil Mill (DTPOM), is owned and managed by the IJM Plantation Berhad. This links the supply chain from smallholders to DTPOM, to Wilmar Refineries, to Nestlé. Eventually, many more brands worldwide will be similarly connected to the smallholders in Sabah. Thus, smallholders are crucial in ensuring the sustainable supply of palm oil from Sabah to various multinational companies with global brands. The mill is located in the Desa Talisai Plantation in the Beluran District, which is about 90 km from Sandakan town in the Malaysian state of Sabah on the island of Borneo. The mill receives 40 percent of its FFB supply from smallholders (38% are an independent smallholders while the rest 2% are smallgrowers). The villages of Ansuan, Baba and Buis are located in a flat area and located in the west of Labuk River. The plots are situated on both sides of the river bank. The villages also border the protected forest reserve.

3 RURAL DYNAMICS DIAGNOSTIC 3 RDD SNAPSHOTS 48 Farmers interviewed 321 Surface area mapped (ha) 186 Tons of FBB delivered by the interviewed farmers Field Officer doing field mapping with a GPS This Rural Dynamics Diagnostic (RDD) was conducted from January to May 2016 with 48 independent smallholders from the villages of Ulu Muanad (Beluran district), Ansuan, Baba, Buis (Meliau region which is located in Telupid district). All the farmers that we interviewed supply Oil Palm Fresh Fruit Bunches (FFB) to DT- POM. In total, there are approximately 200 independent smallholders supplying the mill. Field visit with an oil palm plantation smallholder from the Ulu Muanad Village.

4 MEET THE FIELD STAFF 4 Prasad Vasudevon, Rurality Country Coordinator Lisa Yambau, Field Officer Lakarim Lanika, Field Officer

5 GETTING TO KNOW THE FARMERS Gender 32 Male, 13 Female Average age 52 years old Married 44 Average children per family 5 Percentage of children working 60% (mostly on the family plantation, mills, assisting parents) Average size of land owned by a smallholder 8 ha All smallholders are second generation farmers, meaning they inherited the land and the plantation from their parents. 5

6 FACILITIES IN SMALLHOLDER VILLAGES Access to clean water All smallholders in the Ulu Muanad village do not have access to treated water provided by the government. Access to electricity Almost all smallholders have access to electricity provided by the government Access to telecommunications All smallholders have hand phones, however, internet data service is not stable in all villages Access to healthcare All have access to clinics and hospitals, within 30 km Access to groceries Smallholders are able to buy basic foods and other daily goods at nearby groceries (within km) Access to primary school All smallholders have access to preschool and primary school within 10 km Water supply from rain water tanks. Tanks were provided by government. 6

7 7 LIVELIHOOD STRATEGIES AGRICULTURAL DIVERSIFICATION LABOR MANAGEMENT Smallholders with permanent workers 6 Total workers at all the plots 15 Gender All are males Facilities provided to workers Accommodations, electricity, water harvesting tank and freedom to move around after working hours Salary Contract with salary ranging from RM 500- RM1000 (approximately USD per month) 18 6 Fruit, food crops and livestock 2 Other cash crops only Fruit and food crops only 9 8 Livestock only Fruit only 4 No intercropping or live stock ADDITIONAL INCOME OTHER THEN OIL PALM Ulu Muanad Rubber tapping, selling fruit and vegetable surplus, part time business such as book salesman, making and selling handicrafts (by the wives), working in construction and plantation company, operating mini grocery stalls Ansuan, Baba & Buis Worker in oil palm plantation (harvesting, pruning, weeding and etc. and rubber plantation), operating mini grocery stalls

8 THE WILDLIFE CONFLICT 8 The human elephant conflict issue is an increasing challenge for farmers as they eat young palm fruits. The smallholders resolved to chase the elephants away by making their own sound detonator Detonator made from carbide and can material to chase the elephants away. Wildlife conflict is a major issue faced by 13 smallholders in Ulu Muanad village. According to RDD interviews, elephant encroachment has occurred for many years in Ulu Muanad village, but due recently replanting the area, the encroachment is more severe than ever. The Local Wildlife Department had been informed about this problem, yet little action could be taken due to the financial cost to the smallholders. Often the cost of the accommodation for the wildlife officers and certain tools involved in the translocation is absorbed by the smallholders and burdensome. The small - holders resolved to chase the elephants away by making their own sound detonator from carbide and can material. The explosive sound works temporarily but does not effectively solve the elephant encroachment issues.

9 CHALLENGES FACED BY SMALLHOLDERS OPPORTUNITIES FOR CHANGE 9 OBJECTIVE ACTIVITIES Smallholders with better management of human elephant conflict ( HEC) Conduct in-depth survey of the HEC status, implementation of potential HEC management strategies HUMAN ELEPHANT CONFLICT SMALLHOLDERS NEGLECTING THEIR BUSINESS ACCOUNTS Smallholders producing higher yield of FFB through cost effective and sustainable methods Plan and support activities for smallholders in areas of planting material, plant nutrient management, soil management, pest & disease control, weeding, pruning, harvesting, FFB transportation, and agro input facilties, knowledge in up, keep management for immature fields SOIL FERTILITY AND PLANT NUTRIENT PRACTICES LACK OF ACCESS TO TREATED WATER SUPPLY LEGAL ISSUES OBTAINING LAND TITLE Smallholders with a basic business skills especially related to farm management aspects Plan and develop a module to build smallholder capacity in managing their basic farm management aspects such as budgeting, accounting, book keeping, labour management, agriculture input purchase, replanting strategy, sustainable agriculture & importance of it to today s market USE OF PPE AND CHEMICAL MAINTENANCE LOOSE RELATIONS AMONG SMALL- HOLDERS Smallholder with diversified economic activities Implement the diversification activities advised and supported by the relevant stakeholders via trainings, input support and marketing PEST MANAGEMENT PRACTICES ROAD CONDITIONS AND ACCESS GAPS IN PLOT MAINTENANCE, TOOLS MAINTENANCE, HAR- VESTING AND CROP TRANSPORTATION PRACTICES

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