Transforming the Next 20 Years: How Inclusive Agriculture 4.0 Can Empower the Smallholders Producers Behind 85% of Global Palm Oil Supply
- Carlene Darius
- 2 days ago
- 8 min read
Editorial Notes:
This article is published as part of Koltiva’s involvement at RSPO Roundtable 2025 (RT2025), where Fanny Butler, Senior Head of Markets for EMEA, served as a speaker in the panel discussion “Inclusive by Design: Agriculture 4.0 for Resilient Supply Chains.” While the panel introduced the concept of inclusive by design, this article further expands on what inclusion truly means in practice for the palm oil sector.
Executive Summary
The palm-oil sector sits at the center of global food and economic security, with Indonesia and Malaysia supplying 85% of global production. Yet productivity remains uneven at the first mile, where many smallholders still produce only 2–3 tons of CPO/ha/year, far below potential yields (INDEF, 2021). Closing this gap is essential for meeting rising global demand without expanding into forests.
Inclusion is the defining factor that determines whether the sector can grow sustainably. Smallholders continue to face barriers such as limited agronomic training, costly informal financing, and weak traceability systems. When producers lack access to knowledge, digital tools, and fair markets, supply chains become less competitive and more vulnerable to non-compliance. Empowering first-mile producers is therefore fundamental for improving productivity, governance, and climate resilience.
Agriculture 4.0 provides a pathway to operationalize inclusion, and Koltiva is demonstrating this through its integrated digital ecosystem. By supporting 185,000+ producers, 2,600+ agribusinesses, and mapping over 1.15 million hectares, Koltiva delivers practical tools for traceability, certification readiness, and financial inclusion. At RSPO RT25, Fanny Butler, Senior Head of Markets EMEA at Koltiva, emphasized how inclusive digital ecosystems and verified data strengthen compliance and ensure that no smallholder is left behind in the transition toward a more resilient, equitable palm-oil sector.
Table of Contents
Palm oil supplies nearly 40% of the world’s vegetable oil while using less than 10% of global oilseed farmland, placing Indonesia and Malaysia, producers of 85% of global supply, at the center of global food, fuel, and consumer-goods security (Climate Focus, 2020). Yet the sector now faces mounting pressure from rising demand, escalating deforestation concerns where palm oil remains one of the largest drivers of tropical forest loss, and tightening climate-related regulations. The most critical challenge lies at the first mile, where smallholders manage a substantial share of planted areas but remain the least productive segment, often yielding only 2–3 tons of CPO per hectare annually, far below potential yield (INDEF, 2021). Despite their importance, smallholders still lack access to technology, financing, training, and fair markets, creating a persistent inclusion gap that undermines competitiveness, limits compliance, and threatens the sector’s ability to grow sustainably and meet global expectations.
Why the Future of Palm Oil Starts with Smallholder Producers
The future of the palm oil sector, and its ability to support global food security, energy transition, and sustainability goals—depends on the performance and market access of millions of smallholder producers. Their access to knowledge, finance, digital tools, and fair markets will determine whether the industry can meet rising demand without expanding into forests.
This first mile is where the greatest opportunities and risks converge. When smallholders receive the right tools and incentives, they can significantly increase yields, strengthen governance, and advance national climate commitments. When they are left behind, productivity gaps widen, deforestation risks increase, and supply chains struggle to meet the compliance demands of global buyers and governments.
Realizing this potential requires a holistic approach that strengthens smallholder capacity across three critical dimensions:
Increasing Productivity Without Expanding Land
Despite palm oil’s global dominance, productivity remains uneven. Intensification, through higher-quality seeds, better agronomic practices, and rejuvenation of aging trees, offers the clearest path to bridge productivity gaps while preserving environmental integrity. As mentioned earlier, the CPO production of Indonesian smallholders has not yet reach its maximum potential and effective intensification and rejuvenation of existing plantations could generate an additional 25.6 million tons of CPO per year for food, fuel, and other essential resources without expanding cultivated areas (INDEF, 2021). To address this, 499,399 hectares of smallholder plantations across 11 provinces and 23 districts have been identified as priority areas for intensification due to their low productivity yet suitable biophysical conditions (WRI, 2021). With adequate financing, training, and structured replanting, these areas could deliver rapid and sustainable yield growth.
Supporting Sustainable Farming and Conservation Practices
As the world’s most traded vegetable oil, palm oil has the potential to define sustainability standards globally. Adoption of Good Agricultural Practices (GAP), regenerative methods, and certification systems such as RSPO, ISPO, and MSPO, reduces deforestation risks while improving governance, traceability, and long-term resilience. In Riau, although only 0.48% of total smallholder area is RSPO certified, the area showed stronger documentation, environmental management, and institutional coordination, demonstrating that certification drives systemic improvements even before productivity gains are achieved. These advancements can be duplicated for transformation in other commodities e.g. cocoa, coffee, and rubber (Forest and Society, 2024).
Ensuring Food Security and Inclusive Rural Growth
As the world’s fourth most populous country, Indonesia relies on palm oil not only for export earnings but also for national economic and food security. In the first half of 2025, palm-oil exports reached USD 17.28 billion, a 34.6% increase year-on-year (GAPKI, 2025). The industry supports 16 million workers, contributes 11% of total export value, and plays a major role in reducing rural poverty, especially in Sumatra and Kalimantan (INDEF, 2021). By 2045, Indonesia aims to reach 60 million tons in annual production while maintaining environmental safeguards (WRI, 2021). Achieving this requires empowering first-mile producers with financing, stronger market linkages, and digital traceability.
These realities make one message clear: the palm-oil sector cannot transform unless the first mile is empowered. This is where the concept of inclusion becomes critical — not as a buzzword, but as a structural requirement for sustainable growth.
Why Inclusion is the Missing Link in Sustainable Palm Oil
Achieving a sustainable palm-oil sector requires more than compliance; it requires a system where every producer, especially smallholders, has the ability and opportunity to participate fully. Inclusion ensures that first-mile producers are not only meeting standards but empowered to support a resilient and competitive industry. Yet many still face persistent barriers: limited agronomic training, costly informal finance, exposure to price manipulation, lack of farm records, and fragmented supply chains that obscure traceability. When these challenges persist, the entire sector becomes less competitive, less transparent, and more vulnerable to risks—from deforestation and non-compliance to supply instability and market loss.
As agriculture sector moves into the era of Agriculture 4.0, digital tools, geospatial mapping, and advanced analytics are redefining how palm oil is produced, traded and verified. But these innovations only work when they are accessible to all producers. Without intentional inclusion, digital systems risk widening inequalities and leaving critical first-mile data incomplete.
Inclusion in Agriculture 4.0 means designing technology that fits for real field, rural areas with low-connectivity environments, limited devices and verifying digital literacy. It requires simple, offline-ready tools that enable fair transactions, transparent payments, and access to training and financial services. When systems are inclusive by design, smallholders gain a greater share of value, supply chains become more transparent, sustainability transforms from a compliance requirement into a shared pathway toward long-term resilience.
Making Inclusion Work Through Agriculture 4.0
Agriculture 4.0 offers major opportunities for the palm-oil sector, but only if innovation reaches the first mile. Technology alone does not create impact; it works when digital tools, financial access, and field support come together to empower producers. Koltiva makes this possible through an integrated, offline-ready ecosystem designed for rural, low-infrastructure environments where most smallholders operate. By embedding inclusion into every step, Koltiva strengthens productivity, traceability, certification readiness, and financial access, a foundation delivered through six key action areas:
Producers Mapping & Surveying – accurate geospatial mapping of plots using KoltiTrace MIS FarmXtension.
Training & Coaching – thousands of hours of GAP and sustainability training delivered to enhance productivity.
Traceability Support – end-to-end data verification from farm to export.
Certification Readiness – field verification and documentation to accelerate RSPO compliance.
Financial Inclusion – linking producers to digital finance through KoltiPay.
GAP Implementation – coaching on farm business management, HSE, and environmental standards.
Looking ahead, Koltiva is expanding its FarmCloud farmer application with new product innovations that integrate financial services and agriculture-focused capacity building into a truly inclusive ecosystem. The AI-powered Pest and Disease Identification Tool deliver real-time diagnostics and e-training on pest management and sustainability certification. Meanwhile, KoltiPay’s responsible e-wallet connects smallholders to savings, crop insurance, and pay-later financing aligned with harvest cycles—creating a closed-loop financial system that strengthens resilience. Together with KoltiTrace and KoltiSkills, these platforms unify verified data, financial access, and skill development within a single, offline-ready environment. Designed for low-infrastructure settings, the system leverages open-source data and digital literacy programs to ensure that sustainability is not only achievable but scalable and accessible for rural farming communities.
Bringing Inclusive Agriculture 4.0 to the World Stage (RT25)
Koltiva’s commitment to inclusive transformation extends beyond field programs into global dialogue and industry standards. From 3–5 November 2025, the annual RSPO Roundtable (RT2025) in Kuala Lumpur explored how data-driven collaboration can strengthen accountability across supply chains. Koltiva took part in these discussions through Fanny Butler, Senior Head of Markets, EMEA, and Luca Fischer, Senior Head of Markets, Indonesia.
On 4th November, Fanny Butler spoke at the panel session “Inclusive by Design: Agriculture 4.0 for Resilient Supply Chains,” sharing insights from Koltiva’s field experience and demonstrating how inclusive digital ecosystems make sustainability measurable at scale. She highlighted four priorities for the sector:
Empowering first-mile producers,
Building inclusive digital systems that generate verifiable outcomes,
Ensuring verified data for RSPO, ISPO, and EUDR compliance, and
Guaranteeing that no smallholder is left behind in the transition to Agriculture 4.0.
These insights were grounded in Koltiva’s long term work across Indonesia’s palm oil landscape. Since 2017, Koltiva has supported 185,000+ producers, partnered with 2,600+ agribusinesses, and mapped and verified 1.15 million+ hectares of production areas. These achievements have enabled plantation-level traceability and accelerated Indonesia’s shift toward deforestation-free and inclusive supply chains, demonstrating how inclusion becomes operational through accurate data, strong field coaching, and digital tools tailored for rural environments.
As Fanny emphasised, “The digital revolution must not leave smallholders behind. Our work demonstrates that when technology is built with inclusion at its core, it doesn't just verify compliance; it transforms livelihoods and builds resilience.”
Through its participation at RT2025, Koltiva reinforced its role as a field-proven, future-focused partner for the industry. Its work demonstrates that sustainability starts at the first mile, inclusion is non-negotiable, digital systems must amplify human expertise, and Agriculture 4.0 delivers true value only when it empowers producers. As the sector moves into the next decade, Koltiva remains committed to building supply chains that are not only traceable and compliant but genuinely inclusive, driving long-term resilience for producers, businesses, and the planet.
Author: Carlene Putri Darius, Marketing Communication
Editor: Daniel Agus Prasetyo, Head of Public Relations and Corporate Communications
About the author:
Carlene Putri Darius is a Marketing Communications Officer at KOLTIVA with passion in sustainability and innovation, Carlene Putri Darius integrates her expertise in technology, marketing, and strategy to promote responsible and inclusive growth. With over three years of experience in consulting, branding, and digital communications, she crafts narratives that connect innovation, sustainability, and social impact for international audiences.
Resources
Climate Focus. (2020, March 4). Company progress in engaging smallholders to implement zero-deforestation commitments in cocoa and palm oil. Tropical Forest Alliance. https://climatefocus.com/wp-content/uploads/2022/06/20200312-Smallholder-Cocoa-Palm-Report-Edited_FINAL_0.pdf
GAPKI (Indonesian Palm Oil Association). (2025, August 21). Indonesia’s palm oil exports soar 35% in June 2025. https://gapki.id/en/news/2025/08/21/indonesias-palm-oil-exports-soar-35-in-june-2025/
Forest and Society. (2024). Revisiting the implications of RSPO smallholder certification relative to farm productivity in Riau, Indonesia. Forest and Society, 8(1). https://scholarhub.unhas.ac.id/fs/vol8/iss1/11/?utm_source=scholarhub.unhas.ac.id%2Ffs%2Fvol8%2Fiss1%2F11&utm_medium=PDF&utm_campaign=PDFCoverPages
INDEF. (2021, October 29). Reducing poverty, improving sustainability: Palm oil smallholders are key to meeting the UN SDGs (Working Paper). https://indef.or.id/wp-content/uploads/2023/03/Working-Paper-Reducing-Poverty-Improving-Sustainability-Palm-Oil-Smallholders-are-Key-to-Meeting-the-UN-SDGs.pdf
WRI Indonesia. (2021, November). Intensification of smallholder oil palm plantations: Where do we start? https://wri-indonesia.org/sites/default/files/Intensification%20of%20Smallholder%20Oil%20Palm%20Plantations.pdf
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