The Impacts And Opportunities Of Oil Palm In Southeast Asia

Oil palm basics. Oil palm and palm oil. Historical summary. Palm oil biology, products and productivity. Oil palm cultivation. Yield and its improvement. Palm oil production and global trends. Palm oil production. Biofuel development, demand and expansion. Palm oil prices. The boom continues. A driver of deforestation?. Greenhouse gas emissions.

"This book is a compilation of papers first presented at the workshop "The palm oil controversy in transnational perspective" that took place in Singapore, 2-4 March 2009. The workshop was jointly organized by the Institute of Oriental and Asian Studies, Rheinische Friedrich-Wilhelms-Universit'at, Bonn and the Institute of Southeast Asian Studies (ISEAS), Singapore. It was funded by Asia-Europe Foundation (ASEF)"--Preface.

Oil palm plantations and smallholdings are expanding massively in Indonesia. Proponents highlight the potential for job creation and poverty alleviation, but scholars are more cautious, noting that social impacts of oil palm are not well understood. This report draws upon primary research in West Kalimantan to explore the gendered dynamics of oil palm among smallholders and plantation workers. It concludes that the social and economic benefits of oil palm are real, but restricted to particular social groups. Among smallholders in the research area, couples who were able to sustain diverse farming systems and add oil palm to their repertoire benefited more than transmigrants, who had to survive on limited incomes from a 2-ha plot.

This study comprises a review of oil palm development and management across landscapes in the tropics. Seven countries have been selected for detailed analysis using surveys of the current literature, mainly spanning the last fifteen years. Indonesia and Malaysia are the obvious leaders in terms of area planted and levels of production and export, but also in literature generated on social and environmental challenges. In Latin America, Colombia is the dominant producer with oil palm expanding in disparate landscapes with a strong focus on palm oil-based biodiesel; and small-scale growers and companies in Peru and Brazil offer contrasting ways of inserting oil palm into the Amazon. Nigeria and Cameroon represent African nations with traditional groves and old plantations in which foreign ‘land grabs’ to establish new oil palm have recently occurred.

There is abundant literature focusing on the palm oil sector, which has grown into a vigorous sector with production originating mainly from Malaysia and Indonesia, and on increased palm oil consumption in many countries around the globe, particularly European Union states, China and India. This sector expansion has become quite controversial, because while it has negative social and environmental impacts, it also leads to positive benefits in generating fiscal earnings for producing countries and regular income streams for a large number of large- and small-scale growers involved in palm oil production. This document reviews how the social, ecological, and environmental dynamics and associated implications of the global palm oil sector have grown in complexity over time, and examines the policy and institutional factors affecting the sector's development at the global and national levels. This work examines the geographies of production, consumption and trade of palm oil and its derivatives, and describes the structure of the global palm oil value chain, with special emphasis on Malaysia and Indonesia. In addition, this work reviews the main socioenvironmental impacts and trade-offs associated with the palm oil sector's expansion, with a primary focus on Indonesia. The main interest is on the social impacts this has on local populations, smallholders and workers, as well as the environmental impacts on deforestation and their associated effects on carbon emissions and biodiversity loss. Finally, the growing complexity of the global oil palm value chain has also driven diverse types of developments in the complex oil palm policy regime governing the sector's expansion. This work assesses the main features of this emerging policy regime involving public and private actors, with emphasis on Indonesia. There are multiple efforts supporting the transition to a more sustainable palm oil production; yet the lack of a coordinated public policy, effective incentives and consistent enforcement is clear and obvious. The emergence of numerous privately driven initiatives with greater involvement of civil society organizations brings new opportunities for enhancing the sector's governance; yet the uptake of voluntary standards remains slow, and any push for the adoption of more stringent standards may only widen the gap between large corporations and medium- and smallscale growers. Greater harmonization between voluntary and mandatory standards, as well as among private initiatives is required. Commitments to deforestation-free supply chains have the potential to reduce undesired environmental impacts from oil palm expansion, and while this risks excluding smallholders from the supply chains, such commitments may function to leverage the upgrading of smallholder production systems. Their success, however, will require greater public and private sector collaboration.

The rapid development of oil palm cultivation feeds many social issues such as biodiversity, deforestation, food habits or ethical investments. How can this palm be viewed as a ‘miracle plant’ by both the agro-food industry in the North and farmers in the tropical zone, but a serious ecological threat by non-governmental organizations (NGOs) campaigning for the environment or rights of local indigenous peoples? In the present book the authors – a biologist and an agricultural economist- describe a global and complex tropical sector, for which the interests of the many different stakeholders are often antagonistic. Oil palm has become emblematic of recent changes in North-South relationship in agricultural development. Indeed, palm oil is produced and consumed in the South; its trade is driven by emerging countries, although the major part of its transformations is made in the North that still hosts the largest multinational agro industries. It is also in the North that the sector is challenged on ethical and environmental issues. Public controversy over palm oil is often opinionated and it is fed by definitive and sometimes exaggerated statements. Researchers are conveying a more nuanced speech, which is supported by scientific data and a shared field experience. Their work helps in building a more balanced view, moving attention to the South, the region of exclusive production and major consumption of palm oil.

The Congo Basin is rich in biodiversity and stores an estimated 25%-30% of the world’s tropical forest carbon stocks. As agricultural land becomes increasingly scarce in Southeast Asia, and regulatory pressures continue to intensify, the Congo Basin could become the next frontier for oil palm expansion. Most of the roughly 280 million hectares (Mha) of additional land suitable for oil palm in the Congo Basin are found in the Democratic Republic of Congo (60%), Cameroon (11%) and the Republic of Congo (10%). Many heavily forested countries in the Congo Basin are setting national targets to increase production to meet national and regional demands. Land area allocated to oil palm increased by 40% in the Congo Basin and five additional top-producing countries in Africa between 1990 and 2017. Without intervention, future production increases in the region will likely come from expansion rather than intensification due to low crop and processing yields, possibly at the expense of forest. Sustainability strategies initiated by companies and aimed at certifying palm oil mills are unlikely to be effective at curbing deforestation in the Congo Basin. Smallholder farmers are an engine of growth in the region’s palm oil sector, and recent evidence suggests they are actively clearing forest to expand. Because of the proliferation of non-industrial processing facilities (artisanal mills), a substantial fraction of the palm oil produced by smallholders never passes through a company’s jurisdiction. Smallholders are also disadvantaged by power imbalances and limited access to technical and financial resources. Including smallholders in sustainability strategies offers opportunities to achieve multisectoral goals. Recommendations to improve the sustainability of the palm oil sector in the Congo Basin include (1) improving access to finance for smallholders and non-industrial mill managers; (2) implementing policies to safeguard natural resources and facilitate access to appropriate market opportunities that offer incentives to prevent future deforestation; (3) intensifying production by replanting aging plantations, rehabilitating abandoned plantations with disease-resistant and high-yielding varieties, and increasing fertilization, without further expansion into high conservation value or high carbon stock forest areas; and (4) improving processing capacity and extraction rates by upgrading mill technologies. Sustainable palm oil development in the Congo Basin will require careful consideration of the governance, institutional, environmental and socioeconomic factors that underpin the complex regional supply chains.