Reducing poverty by growing palm oil and conserving forests
In South East Liberia, IDH links smallholder palm oil production with conserving forests and reducing poverty. We do this together with the Liberian government, Golden Veroleum Liberia (or GVL, a palm oil company) and the local community. This means providing financial and technical support for communities to become palm oil outgrowers in exchange for protecting forests. Specifically, we develop outgrower models, fundraise for it and help put in place structures that are needed to make this work. By 2020, the program will have developed over 8,000 hectares of sustainable outgrower palm oil farms and protected 70,000 hectares of forest. Further, we will support the community in ensuring food security though income diversification, gaining access to markets and agricultural inputs.
With financial support from the Norwegian government, IDH, the Liberian government and GVL are collaborating to develop inclusive community outgrower schemes with benefit sharing structures for communities and tying these to forest protection. Outgrowers are individuals or a group of farmers that sell their produce to a company within a contractual agreement. IDH’s role includes, but is not limited to the following:
Co-developing the community oil palm outgrower model with strong environmental, social and economic benefits.
Building a national-level multi stakeholder coalition made up of the relevant public, private and civil society actors that will support the program.
Attracting funding development finance institutions, as well as contract implementing partners.
Why the program
Due to the recent Ebola crisis as well as the past civil wars, poverty rate in Liberia is high. But in recent years, the economy has slowly begun to grow, as have the palm oil and mining industries. The government of Liberia has granted concessions to a number of international companies to grow oil palm, for instance to GVL with concessions in south eastern Liberia near Sapo National Park. To ensure that the people of Liberia benefit from these developments, the government requires that palm oil companies operating in Liberia support the communities around their plantations to grow palm oil. As per the concession agreements, for every five hectares of palm oil plantation that a company develops, it has to help develop one hectare of outgrower plantation. This requires investment and capacity building among others. The concession agreement also stipulates that the government needs to raise the funding needed for these outgrower developments. It is critical to develop the outgrower program in such a way that it raises the communities’ living standards and it is environmentally sustainable.
The benefits
Our inclusive approach benefits all stakeholders. These include
Communities benefit from income and employment; green, inclusive growth; and land-use planning and forest protection that secure their livelihoods.
The government benefits because the program helps achieve Liberia’s 30 percent forest cover target. It also helps develop the outgrower scheme and fundraise for the program.
Palm oil companies benefit by working with communities for expanding production, improving community relations and delivering on deforestation free commitments such as meeting global palm oil sustainability standards.
Development investors benefit because the program’s funding structure can be used for REDD+ payments.
The sustainable outgrower model
The program supports local communities in developing their own oil palm farms and selling their produce to GVL. This requires capacity building as well as financing. GVL will provide capacity building for the community to become oil palm farmers. The community needs to take a loan and invest in their farms. IDH is building the financing structure, where international impact investors can provide funding for communities to take these loans. Norway’s International Climate and Forest Initiative (NICFI) is currently providing first loss guarantee for these loans. An important condition for receiving the trainings and loans is that the community must protect five hectares of forest for every hectare of oil palm farm. They will then receive additional, conditional income for forest protection. This funding will come from the international investment.
Aside from becoming outgrowers and receiving forest protection income, the community receives trainings on alternative income options, such as growing vegetables.
IDH and partners use the free, prior, informed concent (FPIC) method before getting the community involved in the program. Read more here.
This Outgrower scheme has the potential to become the leading model for concession development in Liberia and an example for RSPO.
Our activities
IDH supports the development of the inclusive outgrower model and community benefit sharing structures. We also bring international investment to make it a reality, and finance its implementation through partners. Existing activities include:
Community level activities
Community governance capacity building, supporting FPIC based decision-making process. Our implementing partner, Parley builds community capacity for internal governance and decision making. Among others, it organizes sessions to inform communities about the initiative’s process and goals, and supports them in establishing an inclusive legal entity. This entity will enable the community to then take loans and operate their farms.
Develop Forest Protecion Plan with the community, including the community’s role in monitoring the forest. Our partner Fauna & Flora International is working with the community to develop the Forest Protection Plans. This includes mapping the land, clarifying ownership, past use, and zoning for palm development and protection areas.
Technical Assistance for income diversification and food security through stimulating food supply through Farmer Field Schools, demand through market revitilisation and setting up a market system for farmer inputs.
Landscape level Green Growth Plans
Developing land use planning and development opportunities
Identification of forest for protection
Strengtening the Forest Development Authority’s capacity
Europe imports 69% CSPO for food. European food industry uses 60% CSPO. A new monitoring report by the European Sustainable Palm Oil (ESPO) project shows that there is a growing volume of sustainable palm oil entering the European market
Today, at the UN climate conference COP23 in Bonn, IDH’s landscape work was featured in a report released by WWF on the important role of jurisdictional approaches in achieving sustainable development goals.
The renowned Dutch green development magazine P+ published a detailed article about innovative finance, IDH's forest program in Liberia and the Andgreen.fund. The translation of the article is here:
Supported initiatives in South East Landscape, Liberia
The Oil Palm Outgrower Scheme in Liberia is anchored in the Liberian oil palm concessions, as a joint program between oil palm companies, the government of Liberia (GoL) and the local community with the goal to improve community livelihoods.
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