Whether in the form of seasonal irregularity, flooding, drought or natural disasters with increased intensity and frequency, climate change continues to disrupt harvest plans and crop yields, reads a recent blog post by the United Nations Development Programme.
According to the Food and Agriculture Organization of the United Nations, the agricultural sector is the second-biggest contributor to greenhouse gas emissions after the energy sector.
The agriculture sector is highly vulnerable to climate change; but which agricultural products would we miss the most if crop yields are affected? Rice, corn and other staple crops may come to mind, but consider palm oil — an unassuming yet major food and fat source globally.
Palm oil is versatile and used in a wide range of everyday products like ice cream and chocolate, and even non-edible goods like moisturiser and toothpaste. Palm oil production is highly concentrated in Southeast Asia; Indonesia and Malaysia together account for around 85% of the world’s supply.
The fruit of oil palm trees is the most-consumed crop globally with the highest yield per planted area. According to the US Department of Agriculture’s May 2025 Oil Crops Outlook, global palm oil production is forecast at 80.4 million metric tonnes (MT) for the marketing year (MY) 2025/26, which spans from the fall of 2025 to the summer of 2026. This is 3% up from the previous marketing year.
Global usage — or domestic consumption across food, industrial and biofuels — is projected around 78.5 million MT in MY2024/25.
Musim Mas, a leading palm oil company based in Indonesia, expects global demand for palm oil to grow at a 4.5% CAGR until 2030. “Producers must find ways to increase productivity without exhausting natural resources,” says the Singapore-headquartered company.
To ensure this growth in demand and supply remains sustainable in the decades to come, the agri-commodity industry must innovate and collaborate. No single actor can transform the system alone; Musim Mas, the first company with significant operations in Indonesia to join the Roundtable on Sustainable Palm Oil (RSPO) in 2004, is driving transformation through multi-stakeholder partnerships, from smallholder capacity-building to regenerative agriculture and zero-deforestation supply chains.
Rethinking productivity
The use of innovative technologies for precision agriculture is necessary to meet growing demand. Instead of expanding plantations, Musim Mas increases its yields through solutions from years of research and development.
In November 2023, Musim Mas announced four new oil palm varieties with potential yields nearly three times higher than the industry average. The breakthrough came after 11 years of non-genetic engineering research, and the new seed varieties reportedly yield fruiting palms within 25 months, shorter than the industry average of 30 months.
In particular, the GS3 Dura Angola and GS4 Pisifera Dami Composite seeds increase yields and reduce the risk of disease, ensuring more sustainable and efficient palm oil production.
Another key focus is optimising the fertiliser used in plantations, which is one of the most significant contributors to operational costs today.
But finding the right balance of nutrients for oil palms is tricky; and plantation workers are mindful to avoid Ganoderma infection, a fungal disease that causes trees to produce fewer and smaller fruit bunches.
The soil-borne fungus causes basal stem rot on oil palm trees, and even mild to moderate cases can reduce yields by some 38% to 80%.
Data-driven agriculture has helped “fine-tune” fertiliser application to achieve the best outcome, says Musim Mas. “By conducting regular analyses of leaf samples, we can accurately identify deficiencies and adjust fertiliser use in real time, leading to higher fresh fruit bunches yields and reduced instances of disease.”
At Musim Mas’ second Estate and Research Field Day in November 2024, the company’s research team also presented the use of drones in plantation management to monitor large land areas, detect signs of palm nutrient deficiencies and assess canopy health from above.
According to Musim Mas, drones could be used in the future to “significantly” improve fertiliser and pesticide application.
“Our Estate and Research Field Day is where we bring together our agronomists, R&D teams and estate managers to exchange insights and accelerate the adoption of proven practices across our plantations,” says Olivier Tichit, director of communications and sustainability at Musim Mas. “To ensure that we will feed a growing world population, we believe in improving yields and resilience through agronomic innovation over increasing planted areas.”
The landscape approach
Musim Mas recognises that challenges like deforestation, biodiversity loss or rural livelihoods are deeply interconnected, and addressing these issues in isolation is not ideal.
The company’s “landscape-based approach” is a holistic and integrated framework for managing land sustainably across a defined geographic region. It considers the entire ecosystem — including forests, farms, communities, governments and economic activity — and seeks to balance environmental, social and economic needs within the same area.
There is no one-size-fits-all formula; each landscape has its own characteristics and challenges, says Musim Mas. Thus, the company has focused on five areas — Aceh, North Sumatra, Riau, South Sumatra and West Kalimantan — each with its own priorities.
Since the launch of Musim Mas’ Sustainability Policy in 2014, the company has recognised that solving complex challenges like deforestation, rural poverty and food security requires “jurisdictional thinking”.
“By engaging at the landscape level, we integrate smallholder training, conservation and development goals in a way that delivers longterm resilience,” says Musim Mas. “Governments, producers, buyers, non-governmental organisations (NGOs) and local communities are brought together to align goals and co-develop sustainable solutions that are rooted in [the] local context.”
A recent example is Musim Mas’ Rokan Hulu Landscape and Livelihoods Initiative in Riau, Indonesia. Under this initiative, a government body (Danida), a producer (Musim Mas), a downstream FMCG company (Ferrero) and non-profits (SAN, Agriterra and Preferred by Nature) have come together to support independent smallholders.
According to Musim Mas, the Rokan Hulu initiative addresses these systemic barriers facing smallholders. It aims to empower 5,400 smallholders to adopt regenerative agriculture, improve yields, and reduce chemical inputs by 30%, while safeguarding biodiversity and ecosystem services.
“It’s not about planting more — it’s about planting better. At Musim Mas, we believe sustainable food security begins with collaborative action from the ground up,” says Tichit.
Smallholder Hub initiative
Musim Mas is also training smallholder farmers through its Smallholder Hub initiative to discourage encroachment on forests and protect ecosystems. As of June, Musim Mas has trained about 10,000 smallholders via a network of 490 Village Extension Officers (VEOs) across eight Smallholder Hubs.
The training programme covers good agricultural practices, compliance with No Deforestation, No Peat, No Exploitation (NDPE) commitments, social inclusion, financial literacy and even youth programmes.
The Rokan Hulu Landscape and Livelihoods Initiative will expand the training for smallholder farmers to include regenerative agricultural practices that improve farming conditions, reduce synthetic inputs and strengthen climate resilience.
Funded by the Danish government’s Danida Green Business Partnerships (DGBP) programme, the five-year project will also strengthen two farmer organisations and help 2,500 farmers achieve certification under the Roundtable on Sustainable Palm Oil (RSPO) and Indonesia Sustainable Palm Oil (ISPO) standards.
In addition, it aims to create diversified income opportunities for 2,000 community members — 60% of whom will be women — while implementing measures to safeguard biodiversity and mitigate deforestation risks.
Another notable collaboration is Musim Mas’ partnership with Bunge, a New York Stock Exchange-listed agribusiness and food company.
The collaboration, which began in November 2023, aims to train more than 1,000 independent smallholders in good agricultural practices, business management and NDPE approaches to palm production.
More recently, Norwegian impact fund manager Abler Nordic partnered with Temasek Foundation, Musim Mas and international coalition Livelihoods Funds to launch the Sustainable Oil Palm Replanting in Indonesia (SOPRI) project.
The blended finance pilot initiative, announced in March, aims to help smallholder farmers access financing and resources to sustainably replant oil palms, potentially increasing their income while preventing forest encroachment — the illegal expansion of cultivable land.
In its first phase, the SOPRI project will support 400 smallholders across 400 hectares in Sumatra, offering long-term replanting loans, financial literacy training, sustainability certification, land title support and participatory village-planning to promote responsible land use, reads a March 24 announcement.
In return, smallholders commit to avoiding forest encroachment. This is monitored through satellite and on-the-ground checks. Future phases of the project aim to reach over 20,000 smallholders.
Temasek Foundation is involved in the blended finance model by setting aside an undisclosed amount of catalytic capital to guarantee and derisk loans to smallholders. This reduces financing costs for smallholders and makes attracting private investment more viable.
Progress through partnerships
Sustainable transformation is only possible through partnerships, which help create shared understanding among industry stakeholders, governments and civil society.
“Palm oil has a crucial role to play in global food security. It must be produced responsibly. That requires collaboration across the value chain — from financiers to farmers, brands to governments,” says Tichit. “We see ourselves as a catalyst. Musim Mas is ready to co-invest, co-create and co-lead with others to build a resilient, inclusive and sustainable food system.”
He adds: “The future of food won’t be shaped in isolation. It will be built together — one farmer, one partnership, one landscape at a time,” he adds.
