Palm oil is the most consumed oil globally with an annual consumption of 50 million tonnes per year. This constitutes 28% of the global oils and fats market share followed by soyabean oil at 24%. Developing countries consume approximately 75 % while the balance is taken up by developed countries. Palm oil is popular due to its affordable price and easy availability throughout the year. It is the only oil that has a significant nett excess in terms of production. Malaysia and Indonesia, the two largest producers are also the sole nett exporters, accounting for 87 % of the global net exports of oils and fats. Palm Oil remains the only oil that is certified as sustainably produced. Despite its dominant share of the world’s oils and fats production and exports, oil palms occupy less than 5% of the total land dedicated to planting of oilseeds while ensuring sufficient supply of vegetable oils and fats to the world markets.
The current trend for oil processors and ENGOs to insist on using only certified sustainable palm oil is highly abnormal as there are no similar calls to use only sustainable soya, sunflower or rapeseed oils. None of these oils can be certified sustainable because most are genetically (GMO) modified. The superior capability of palm oil to produce sufficient volume of certified sustainable oil to meet the needs of the processors in the EU, Australia and USA is a positive factor for its market acceptance.
Palm oil’s success in the world’s oils and fats market generates its own set of problems. Among the developed countries, Australia, USA and EU have had protectionist measures imposed to protect their oilseeds against competition from imported palm oil. These countries have active environmental NGOs who have been carrying out anti-palm oil campaigns. Some of these ENGO’s receive up to 70% of their operating budgets from their governments. As major producers of oils and fats, these countries aspire to divert a significant amount of their oils and fats supply to be used for biodiesel production. The protectionist measures prevent palm oil from participating in the highly subsidised biodiesel market. Local farmers have forced policy makers to generate policies in support of local oil seeds to enable them to receive the biodiesel subsidy or fuel tax exemption, while not making these facilities available for imported palm oil.
The protectionist policies of these three developed countries have created unintended side effects on trade. Firstly, these countries could violate WTO provisions by discriminating on imported palm oil which is considered a ‘like’ product for use in the biodiesel industry. Secondly, employing the ENGOs as pressure groups to oppose the importation of palm oil has resulted in misinformation being propagated on palm oil without proper factual justification. For example, palm oil is linked to deforestation or palm oil is claimed to contribute to major consumption of saturated fats. This is certainly not true for the case of Malaysian palm oil.
In the US, NGOs such as Rainforest Action Network (RAN) and the Union of Concerned Scientists (UCS) are known to be anti palm oil campaigners. In the EU, anti palm oil NGOs include Friends of the Earth (FOE)and Greenpeace. In Australia, Zoos Victoria and the local chapter of WWF have been campaigning against palm oil. Many proxies such as the US Girl Guides or individual students in New Zealand have been ‘recruited’ to add further dimension of support to the anti-palm oil campaign.
The anti-palm oil campaigns have no logical justifications. Palm oil is an agricultural product of tropical countries and the crop unfortunately cannot be cultivated in temperate countries. Similarly, rainforest and orang utan do not naturally exist in temperate countries even though western NGOs with exotic names often linked to rainforests and orang utan seem to patronize these entities claiming to champion their right rather than the people in the tropical countries. NGOs from tropical countries should send a message saying “Hands off my rainforest and my orang utan” to their western counterparts. The green NGOs of the west are not the guardians of our rainforest and orang utans. Instead, they are opportunists who use these exotic entities collect donations to enrich themselves and receive government grants to carry out their protectionist campaigns against the imports of palm oil into their countries.
The real guardians of the rainforests and orang utan of Malaysia are the people of the country. The forestry and wild life departments of the country have long put into place conservation policies and programmes to preserve our forests and wildlife habitats. Due to these efforts, Malaysia is today able to conserve 56 % of its land under permanent forest cover. This effort is reinforced by the government’s commitment to keep a minimum of 50% of the country under permanent forest.
The consistent policies since the 1960s of maintaining sufficient rainforest and protecting the wild life have resulted in the orang utan population stabilizing or even increasing as reported recently. Today, Malaysia has a much higher percentage of forest as compared with other developed countries where the active anti-palm campaigns are generated. It is illogical for them to criticize Malaysia’s development policy or our oil palm cultivation as forest upkeep is more than sufficient for conservation and biodiversity preservation purposes as Malaysia sets a much higher standard of forest conservation than they do in their country.
The use of land for agriculture where oil palm is grown in Malaysia is only a small percentage of our land area, much smaller than the percentage of land used for agriculture in the US, EU or Australia. Oil palm, the main agricultural crop occupies only 15 % of Malaysia’s land area (24% under agriculture) while in the UK, Greece, US and Australia, agriculture land use is much higher at a rate of 72%, 63.6%, 44 % and 53.2% respectively.
It is illogical for Greek and French politicians in their debates in the EU parliament to keep harping on deforestation when a small percentage of Malaysia’s land area is used for cultivating oil palm which is the country’s main agricultural crop.
The ENGOs have used many forms of campaigning, including employing green party politicians to propose anti palm oil legislations as was done in Australia and France recently. In the US and EU, Government policies on biofuel are subjected to ENGO pressure to prevent the use of palm oil. The criteria for acceptance of local oils and fats are formulated through cleverly devised methodology to disqualify palm oil from being used in the local biodiesel market. Even those with dubious credibility are roped in to lend ‘scientific merits’ to these anti palm oil campaigns.
Oil palm plantations have developed gradually over the last 100 years and behave just like the rain forest as a net remover of carbon dioxide or green house gas from the atmosphere. The US, EU and Australia should be promoting the use of more palm oil biofuel as it gives the largest removal capacity for GHG from the atmosphere. Is does not matter which country’s atmosphere is referred to as the CO2 concentration to cause global warming is not country specific.
The deliberate protectionist policy directed at palm oil brings strange outcomes that puzzle the logical minds. The most capable biofuel source that can remove ten times more GHG is deliberately avoided. The least efficient oil source and most land intensive crop such as soyabean is promoted resulting in the exploitation of at least 10 times more land area for the cultivation of crops such as soybean. In short, palm oil which can drive a WW Polo car for 200000 km from one hectare per year of oil palm plantations is not used as a biodiesel source in developed countries as local oils are favoured. In contrast, one hectare of soyabean, can only supply soya oil biodiesel per year that can drive a similar car for only 8000 km
When the big buyers such as Unilever and Nestlé insist on buying only fully segregated palm oil certified by RSPO, palm oil millers are forced to reject fruit bunches from smallholders from surrounding estate mills as they are not RSPO certified. But these smallholders have been farming their land for decades and they are not involved with any recent deforestation. They are as sustainable as the RSPO certified estate plantations, but find the RSPO certification process far too expensive as there are too many of them for RSPO to certify. While the NGOs and big buyers sit in their offices in Europe dreaming of sourcing segregated sustainably produced palm oil, thinking that they are not involved in any deforestation due to oil palm cultivation, they are victimizing the small farmers who lose their livelihood as estate mills avoid accepting their oil palm fruits for the sake of producing segregated palm oil.
The victimization of the innocent small farmers is an unfortunate outcome of the ENGO campaigns. The soybean small farmers are not subjected to any of such pressure even though they are involved in recent deforestation and their soybean is not sustainably produced. The double standards are akin to apartheid treatment of the small oil palm farmers. The green NGOs that campaign for the “No killing of orang utan” should now campaign for “No killing of small oil palm farmers.” who produce 40 % of palm oil in Malaysia. The small oil palm farmers being victimized should be compensated by those responsible (the ENGOs, and segregated oil buyers) for their loss of livelihood and they should be given legal assistance to seek redress on their predicaments. By forcing the big buyers to buy certified segregated palm oil, the NGOs may have the illusion that they are trying to save the orang utan, although these animals are well protected under the Malaysian laws. This results in the small oil palm farmers being victimised and eventually losing their only source of income because the ENGOs have miscalculated the impact of their anti-palm oil campaigns. Harming the small oil palm farmers should not be the intention nor the outcome of the anti-palm campaigns which are funded from their governments and taxpayers money.
Similar distortions are generated by the pressure groups opposed to greater consumption of palm oil. By bringing in the fear factor that saturated fats consumption will lead to heart disease, they hope to link palm oil as a source of saturated fat and discourage its consumption as was proposed in France recently in the Nutella tax debate, or the Australian labeling proposal. Little consideration is given to the fact that saturated fats are so universally present in the animal kingdom that it is illogical to think of excluding them from the diet. The main source of saturated fats in the western diet comes from meat, cheese, milk and butter, and not from palm oil.
The irony is that the countries with active anti-palm oil NGOs are not self sufficient in their supply of oils and fats. Despite the NGO opposition, importation of palm oil into the EU increased by about 12% in 2012, and the US continues to import over a million tonnes of palm oil annually. Palm oil is needed to help these countries reduce the consumption of unhealthy trans fatty acids derived from hydrogenating soft oils, while its use in biodiesel and food products provides at least 30% saving because of its relatively lower price. Palm oil seems to benefit not only the producers as a source of revenue but also the importers who are keen to improve consumers health, reduce land exploitation and help fight inflation.