In the 1960s, Nigeria’s palm oil production accounted for 43% of the world production. Today it accounts for only ~3-5% of total global output, and Nigeria is a net importer of palm oil. 80% of production comes from dispersed smallholders who harvest semi-wild plants and use manual processing techniques.
Several million smallholders are spread over an estimated area of 2.1 million ha (83% of the production area). Oil palm plantations or estates cover around 118,264 ha and make up only 5% of the palm oil production in Nigeria. The remaining 12% of production comes from smallholder government schemes and cooperatives, out-grower schemes, commercial smallholders, and medium-sized farms.
Some of the major constraints to the development of the oil palm sector include:
- Lack of access to enough high-quality inputs (especially planting material and fertilizer in the case of oil palm)
- Unreliable distribution (incl. poorly timed delivery of inputs to farms) and agro-dealer network
- Poor systems for identifying farmers that need subsidized inputs (insufficient means testing)
- Low level of commercialization, access to information/knowledge
- Tenure issues in long term land ownership/lease preventing effective farm investments and planning
- Expansion of oil palm plantations is seen as a threat to tropical forest ecosystems.
However, the Federal and State Governments have developed efforts towards revitalizing the sector through various oil palm development and environment friendly programs. One example is the land concession policy of Edo and Ondo State governments for the development of oil palm plantation by private investors, with special attention to smallholder inclusion.
To address these challenges, IDH together with key stakeholders started a Sustainable Palm Oil Landscape Program in Edo State and Ondo State in Nigeria. This program is in line with the joint IDH-Solidaridad initiative NI-SCOPS.
The program is based on IDH’s PPI Approach. This means working with industry partners (from the palm oil and other sectors), the public sector, farmer associations, financiers, CSOs, and knowledge partners to jointly develop a vision and action plan that balances sustainable production (P), forest and natural resource protection (P), and social inclusion (I) within selected landscapes or so-called “hotspot areas”.
To achieve the objectives of NI-SCOPS in Ondo and Edo State, the PPI approach is further disaggregated into a five-pillar strategy:
- Convene multi-stakeholder initiatives (state-level) and development of and implementation of a Green Growth Plan (incl. targets and monitoring mechanism).
- Increase public and private investment in the landscapes to incentivize sustainable climate smart oil palm production by smallholders while protecting forest and peat land and restoring previously degraded land, and creating Verified Sourcing Areas.
- Develop and comply with agreements with the governments to improve the national sustainable palm oil standards/guidelines to meet demands in the market.
- Convene district-level multi-stakeholder initiatives and development of effective Production, Protection, and Inclusion Compacts to ensure agreements between public, private and civil society stakeholders to make land more productive and improve livelihoods in exchange for protection of natural resources, most notably forests.
- Implement field-level projects/developing PPI – compliant Business models, and Service Delivery Models around sustainable climate smart oil palm production by smallholders.
With estimated 8,900 smallholder oil palm farmers in both Edo and Ondo states, NISCOPS program is targeting:
- 5,250 smallholder farmers and small/medium scale processors in both states along the (up-stream) value chain (production, processing, market access) while strengthening measures to reduce the effect of climate change and protect neighboring forest is adopted.
- 2,000 other value chain actors including harvesters, machine operators, transporters and marketers will benefit indirectly.
Endo State & Ondo State
- Increased yield/ha of smallholder farms by at least 30% while improving oil palm production on 18,375 ha,
- Increased incomes of smallholders and other entrepreneurial value chain actors by at least 25%,
- Restoration of degraded land to productive use
- Protection of 36,750 ha of forest areas.
- Investment opportunities in oil palm value chain in Ondo and Edo States that will leverage blended finance transactions with IDH grant funding, private funding, impact funds and commercial finance from banks such as the Central Bank for Nigeria.