Accra: A new report, Palm Oil Barometer 2025: Procurement for Prosperity, has called for a fundamental shift in global palm oil procurement practices. The report emphasized the need for equitable value distribution to support smallholder farmers in West Africa.
According to Ghana News Agency, the report highlighted that oil palm remains a vital crop for food security and income for millions, especially smallholder farmers across West Africa. It has the potential to help farming families emerge from poverty within a single generation. The 2025 Palm Oil Barometer, developed by Solidaridad and co-signed by various smallholder representatives and experts, identified critical imbalances in the current market, where smallholders often receive a disproportionately small share of profits despite their significant contributions.
In Ghana, smallholders manage approximately 81 percent of the nation’s oil palm area, yet many face low yields and limited access to markets. Similarly, in Nigeria, smallholders contribute to 80% of production but struggle with outdated processing methods and insufficient infrastructure. The report noted that C´te d’Ivoire’s smallholders manage 73 percent of oil palm areas, while in Sierra Leone, small-scale farmers account for about 70% of production, often relying on wild palm groves. Meanwhile, West Africa consumes more palm oil than it produces, leading to dependency on imports.
‘This imbalance, compounded by systemic barriers, limits smallholder farmers’ ability to increase incomes and contribute to national food security,’ the report stated. Mr. Muthalir Ramasamy Chandran, Chairman at IRGA.AG and Advisor to the Roundtable on Sustainable Palm Oil, emphasized the need for governments and industry to collaborate with sustainability certification platforms to adopt new business models that support improved access to inputs and markets for independent smallholders.
The core finding of the 2025 Palm Oil Barometer was that value is inequitably distributed throughout the supply chain, leaving smallholders at a loss in their efforts to produce sustainably. Additionally, farmers struggle to invest in practices that support resilience in the face of climate change. Smallholder farmers in Africa rely on precarious incomes subject to volatile prices and extreme weather conditions exacerbated by climate change.
Mr. Michael Opong, an oil palm farmer in the Eastern region, expressed that oil palm production faces serious challenges in his community. He highlighted the lack of access to proper tools, equipment, and infrastructure, leading to low yields and poor processing capacity. Despite training, the low income prevents farmers from investing in improvements, keeping productivity stagnant and hindering sector growth. He called for consistent, targeted support to overcome barriers and contribute meaningfully to the global palm oil market.
He emphasized that consistent underinvestment and lack of equitable value distribution threaten the entire sector. Without access to better financing, technical assistance, and sustainable farming incentives, small farmers often resort to short-term survival strategies that can contribute to environmental degradation. Additionally, land tenure insecurity poses challenges, limiting smallholders’ ability to invest in long-term sustainability and discouraging compliance with stricter environmental regulations.
The 2025 Palm Oil Barometer advocated for a transition from current sourcing practices to a ‘Procurement for Prosperity’ approach. This involves moving beyond sustainability certifications to ensure that palm oil procurement positively impacts suppliers, particularly independent smallholders, through fairer trading practices and genuine partnerships.
The report outlined four core principles for Procurement for Prosperity: integrating procurement practices that recognize independent smallholders, fair pricing and payment terms that reward sustainable practices, partnerships and collaboration across the supply chain, and supporting suppliers by investing in organizational strengthening and access to finance.
Madam Marieke Leegwater, Senior Policy Advisor at Solidaridad Europe, stated that simply demanding sustainable production is insufficient. Companies need to commit to an inclusive value chain that recognizes and integrates independent smallholder farmer perspectives, enabling sustainable production through fair prices that allow for a living income. She stressed the importance of a balanced approach addressing deforestation by large-scale plantations while ensuring human rights and smallholder inclusion to create a stable supply chain with reduced risk.
The Palm Oil Barometer 2025 provides concrete recommendations for value chain actors, multi-stakeholder initiatives, public policymakers, and the financial sector to advance smallholder inclusivity and create a more resilient palm oil industry. Every actor has a role to play in ensuring fair value distribution and supporting the prosperity of independent smallholders who are critical to the sector’s future.