An Analysis of Independent Smallholders’ Perception on MSPO Certification and Its Subsequent Influence on The Participation Decision
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Abstract
Sustainability certification has been introduced in the early of 1920s to control negative environmental and social effect in food industry. As the second largest palm oil producer and exporter in the world, Malaysian palm oil industry also not left behind to establish its own sustainability certification known as Malaysia Sustainable Palm Oil (MSPO). This certification requires its members to comply with its principles and guarantees for certified palm oil production. It is important to produce and export only certified palm oil in order to brand Malaysian palm oil as sustainably produced, safe and widely accepted in the global market. Hence, the government put much effort in promoting MSPO certification to Malaysian palm oil supply chain. However, the current number of independent smallholders that certified this certification is only 1.3% and it is relatively low. In fact, they became the second largest supplier of fresh fruit bunches (FFB) with 16.3% after the private estates. This is due to lack of knowledge and training on the certification as well as financial resources limitation. Hence, it is important to understand their perceptions on MSPO certification and the factors affecting the perception in order to understand the real and ensure the effectiveness of this initiative since these smallholders play a vital role in supplying FFB. The study enhances sustainability practices among independent smallholders and contributes to the implementation of MSPO certification.
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