ABSTRACT
The Colombian oil palm sector is organized in clusters made up of one main node and several peripheral nodes. The main node produces fresh fruit bunches (FFB) in large scale and it has a mill where palm oil is extracted. Peripheral nodes also produce FFB that are sold to the main node. Such peripheral nodes are made of small-and medium-sized FFB producers who are located near the main node. Fedepalma (The Colombian Federation of Oil Palm Growers) suggested to the main nodes that they should change their view about small-and medium-scale growers; they should consider them not only as raw material providers, but
also as strategic partners. Therefore, the main node should be in charge of organizing technical assistance for fruit providers and also, it should be in charge of facilitating the access of FFB providers to credit, inputs and services (such as machinery). In Colombian rural areas, this is important because of the lack of access to formal credit for smallholders and the absence of governmental institutions in charge of technology transfer. The FFB suppliers honour their debts to the main node at the moment they receive the payments from the fruit they sell (periodically). The fruit suppliers’ plantations using best agronomic practices will be less prone to attacks by pests and diseases, which improves not only their own sanitary conditions, but also those of the nearby main node plantations, as pests and diseases will not be transferred from one plantation to another. This is therefore a winwin strategy, given the fact that fruit suppliers, having better conditions, will have higher yields and their income will increase, while at the mill, the use of the installed capacity will increase, which in turn, implies a decrease in the fixed costs of the oil extraction process.
