Easing the burden of collecting supply chain data and ensuring ESG Compliances in Palm Oil Industry
Thailand’s agricultural sector, including its vibrant oil palm industry, plays a pivotal role in the nation’s economy. However, smallholder farmers often face numerous challenges, including limited access to information, market inefficiencies, and fluctuating prices.
Given the rise of mandatory sustainability disclosure, this article explores demands related to supply chain sustainability transparency, challenges with supplier data, and methods to improve data quality and to enhance sustainability performance through technology and engagement methodologies.
In 2024, industry have started questioning the continued role of voluntary reporting standards and frameworks like the International Sustainability Standards Board (ISSB) and Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), CDP (formerly Carbon Disclosure Project), and Taskforce on Climate Related Financial (TCFD).
These organizations have influenced many of the regulatory requirements and continue to expand their reporting categories to remain relevant.
Industry is looking at releasing enforceable standards and frameworks that sets global baseline despite the need to comply with more extensive and stringent mandatory regional regulations.
However, businesses look at how to make it more practical in terms of their business operations.
Example: A German headquartered business with operations also in non-European markets and sourcing/manufacturing in Southeast Asia markets like Thailand, may not adopt the stringent mandatory European Sustainability Reporting Standards (ESRS) for its entire global operations.
If they try to adopt ESRS, it will impose an exorbitant workload on the sustainability team and expose information that may have adverse effects on their global operations.
This means they would adopt and continue to use a voluntary framework to maintain an acceptable level of ESG disclosure reporting to other regions.
In recent years, technological innovations have emerged as powerful tools to address these challenges.
Technology in action among the small holder community in Thailand
A case in point is the way new generation technologies have transformed and ease the lives of oil palm smallholders in Thailand.
One of the application developed by the Sustainable and Climate-Friendly Palm Oil Production and Procurement (SCPOPP) in collaboration with the Department of Agriculture Extension and the Department of Agriculture, is a groundbreaking mobile application underpinned by latest technologies.
The application, designed specifically for oil palm smallholders in Thailand, serves as a comprehensive digital toolkit aimed at empowering smallholder farmers and revolutionizing their farming practices.
The key features of the application
Real-time Information Access
The application provides smallholders with access to up-to-date information on weather forecasts, pest outbreaks, disease management techniques, and best agricultural practices.
This real-time information enables farmers to make informed decisions regarding crop management and resource allocation, ultimately optimizing their yields and minimizing losses.
Market Insights
One of the primary challenges faced by smallholder farmers is the lack of market information, which often results in uncertainty and exploitation by middlemen.
The application addresses this issue by providing farmers with market insights, including current prices, demand trends, and buyer preferences.
Armed with this information, farmers can negotiate better prices for their produce and explore new market opportunities.
Precision Farming Tools
The application offers a range of precision farming tools designed to enhance efficiency and sustainability in oil palm cultivation.
These tools include modules for precise irrigation management, fertilizer application, and pest control, allowing farmers to optimize resource usage and minimize environmental impact.
Marketplace Integration
In addition to providing information and tools, the application serves as a platform for market integration, connecting smallholder farmers directly with buyers, processors, and exporters.
By eliminating intermediaries and facilitating direct transactions, the app enables farmers to access fairer prices for their produce and improve their income.
Traceability and Certification
The application promotes transparency and accountability in the supply chain by enabling farmers to track the origin of their produce and obtain certification for sustainable farming practices.
This traceability feature not only enhances consumer trust but also opens up opportunities for smallholders to access premium markets and command higher prices for certified products.
User Interface and Accessibility
The application features an intuitive user interface designed to be user-friendly and accessible to farmers with varying levels of technological literacy.
The app is available in multiple languages, including Thai, and can be accessed via smartphones or tablets, ensuring widespread adoption and usage among oil palm smallholders across Thailand.
Here are the ways the application helps Oil Palm Smallholders in Thailand
1. Empowering Smallholders Through Technology
The application aims to empower oil palm smallholders by providing them with real-time information, market insights, and essential tools to enhance productivity and profitability.
Through the app, farmers can access weather forecasts, pest management techniques, best agricultural practices, and market prices instantly, enabling them to make informed decisions and optimize their yields.
2. Improving Efficiency and Sustainability
By leveraging application, smallholders can streamline their operations, reduce wastage, and adopt sustainable farming practices.
The app offers modules for precise irrigation management, fertilizer application, and pest control, helping farmers minimize resource usage while maximizing crop output.
Moreover, the app promotes environmental stewardship by encouraging the adoption of sustainable cultivation methods, ultimately contributing to the conservation of biodiversity and natural resources.
3. Enhancing Market Access and Income
One of the significant challenges faced by smallholder farmers is the lack of direct market access, which often results in exploitation by intermediaries and low farm gate prices.
The application addresses this issue by connecting farmers directly with buyers, processors, and exporters, eliminating middlemen and ensuring fairer prices for their produce.
Additionally, the app facilitates traceability and certification, enabling farmers to access premium markets and command higher prices for sustainably produced palm oil.
4. Fostering Knowledge Sharing and Community Building
Beyond its technological features, the app serves as a platform for knowledge sharing and community building among oil palm smallholders.
Farmers can interact with experts, agronomists, and fellow farmers, exchanging experiences, troubleshooting problems, and learning from each other’s successes.
This collaborative environment fosters solidarity and resilience within the farming community, empowering smallholders to overcome challenges collectively and thrive in an ever-changing agricultural landscape.
How #dltledgers PROTEUS Platform can Enhance the Impact for Small Holders & Large Enterprises?
Smallholders who are already benefiting from application in Thailand can further amplify their success and streamline their operations by plugging into the digital private networks for large enterprises powered by #dltledgers PROTEUS platform, based on the supplier relationships and their agreements as contract farmers.
Their application becomes the source of quality data to be integrated through #dltledgers BC link connectivity layer for authentication data at source and running smart contract for a secure transaction by being embedded in the network.
The data can now be shared across the distributed ledger network ensuring compliance and mitigating risk in supply chain.
#dltledgers, a blockchain-based platform, offers a range of features and benefits that ultimately empowering smallholders and ensures a healthy supplier network enhancing value chain productivity, improved market & finance access, and ensure transparency and trust across the supply chain.
Supply Chain Traceability
An integrated solution – #dltledgers PROTEUS Platform and mobile application with smallholders can achieve unprecedented levels of supply chain traceability for their palm oil produce.
#dltledgers utilizes enterprise blockchain technology to create an immutable record of transactions and movements throughout the supply chain, from farm to fork, recording & tracking in real-time the origin/provenance and chain of custody.
This enables large enterprises with enhanced visibility on their network of smallholders, to track the journey of their palm oil products in real-time, ensuring transparency and accountability at every stage of the process.
By providing consumers with visibility into the origin and production practices of their palm oil, one can enhance consumer trust and access premium markets that value sustainability and ethical sourcing.
Transparent Transactions
#dltledgers facilitates transparent and secure transactions between large enterprises, smallholders, survey agents, processors, and exporters within the palm oil supply chain.
Through smart contracts and digital documentation, #dltledgers automates and streamlines the trading process, reducing paperwork, minimizing delays, and eliminating the risk of disputes or fraud.
Smallholders can confidently engage in transactions knowing that their interests are protected and that payments will be securely processed in a timely manner.
The extended supply chain visibility provided by the integrated solution allows banks/financial institutions to view the supply chain actors differently and provide better financing options.
This transparency and efficiency contribute to the overall profitability, health and sustainability of smallholder operations.
Access to Financial Services
One of the key challenges faced by smallholders is access to financial services, including credit and insurance.
#dltledgers can help address this challenge by providing smallholders with a digital identity and a verifiable transaction history on the blockchain.
This data can be utilized by financial institutions to assess creditworthiness and offer tailored financial products in their microfinancing portfolio of products to smallholders, such as loans for agricultural inputs or insurance against crop loss.
By bridging the gap between smallholders and financial services, #dltledgers enables smallholders to invest in their farms, mitigate risks, and build resilience against economic uncertainties.
Market Intelligence and Optimization
#dltledgers PROTEUS Platform & running the application, as an integrated solution, can provide smallholders with valuable market intelligence and optimization insights.
By analysing data from blockchain transactions, #dltledgers can identify market trends, demand fluctuations, and pricing dynamics in real-time.
Smallholders can leverage this information to make data-driven decisions regarding crop planning, production scheduling, and market participation, maximizing their profitability and competitiveness in the palm oil market.
Conclusion
In conclusion, the integrated Solution: #dltledgers PROTEUS Platform + Mobile Application offers significant benefits for oil palm smallholders in Thailand.
Businesses may look at short term resolution to their challenges of needing limited visibility on small holder farm and bringing a level of productivity, However, the emerging challenges in terms of sustainability disclosures demands more.
They will quickly realise that complexity of collecting data, maintaining it and reporting is overly challenging to manage.
A purpose-built technology platform like #dltledgers PROTEUS Platform is the technology framework to embrace to resolve these challenges across the extended supply chain.
By enhancing supply chain traceability, facilitating transparent transactions, enhanced security, data integrity & visibility, improving access to financial services, and providing market intelligence, #dltledgers PROTEUS platform empowers supply chain of large enterprises with smallholders embedded in network to further optimize their operations, improve their ecosystem partners livelihoods, and contribute to a more sustainable and transparent palm oil industry.
Get in touch with our experts if you want to integrate #dltledgers application with your mobile app or any other existing ERP system.
