Palm oil has been hit by negative campaigns in the West. Several Members of the European Parliament visit a Felda plantation to get a wider view of the issues.
THE singular row of corn growing by the side of the road seems a little out of place.
Its tall stems sway in the breeze, as our party of European parliamentarians disembark after their two-hour minivan ride from the hotel in Kuala Lumpur. The most striking observation upon our arrival in Sungkai, Perak, is that residents of the Federal Land Development Authority’s (Felda) Besout 2 settlement have a penchant for gardening.
Bungalows lining the oil palm-flanked road leading into the settlement are decorated with a variety of cheerful potted plants. It’s a light-hearted moment in the trip, a chance for the Members of the European Parliament (MEP) to meet some local oil palm smallholders.
They are introduced to 64-year-old farmer Sabran Aini, a first-generation Felda settler who has lived off his 4.1ha estate for 32 years. He invites them on a tour of his modest bungalow. Meanwhile, a couple of ladies from the local women’s group Gerakan Persatuan Wanita, who helped prepare the lunch that is waiting for us over at the community hall, hover around his garden outside.
The corn across the road they reveal, was planted by Sabran. He’s got a trellis of passion fruit, and little buckets of ornamental padi too.
Felda’s exceptional talent for gardening, it turns out, can be explained by a community-wide effort to bag the annual Felda village beautification award, which comes with a RM1mil grand prize. The Felda settlements are built on collective incentives such as this.
In total, 112,635 settlers farm 397,600ha worth of smallholdings, scattered across 370 schemes throughout the country. They live in self-contained communities, with about 300 families sharing a school, community hall, clinic, and other government-provided amenities.
Most importantly, they receive a share of the wealth accrued from the nation’s most lucrative crop – oil palm. According to Felda, monthly incomes average at around RM3000, through the sales of fresh fruit bunches to the nearest mill (villagers share in transportation costs, benefiting from an economy of scale).
The farmers’ earnings are supplemented by shares in the farmers investment cooperative, known as Koperasi Permodalan Felda (KPF).
KPF own shares in Felda Global Ventures (FGV), which owns Felda Holdings – the largest producer of crude palm oil in the world.
The average farmer has about 180,000 shares invested in KPF and with annual returns ranging at 12%-15%. That translates into additional income of about RM22,500.
It may not sound like a huge amount, but it ensures that it isn’t just big corporations that profit from palm oil. The little guys get a cut too and this is the chapter in Malaysia’s palm oil story that our host, the Malaysian Palm Oil Council (MPOC), wanted the MEPs to hear.
Smallholders cultivate 40% of the 5.1 million hectares of oil palm in Malaysia. But its importance to the livelihoods of local people is just one, of many sides to a story European consumers rarely get to hear.
Up until about 10 years ago, palm oil remained obscure to ordinary Europeans. Then NGOs there began linking the crop to deforestation and alarm bells began to ring, and since then it’s mainly been bad publicity.
This has been both good and bad. On a positive note, it provided the impetus for the industry to make a shift towards sustainability. The year 2004 saw a formation of the Roundtable on Sustainable Palm Oil (RSPO), under which a system for certification was created.
Its aim was to encourage sustainable practices across the supply chain – following principles and criteria laid out by its members. NGOs, retailers, manufacturers and other industry stake holders came together for the first time to work towards a common goal. Unfortunately, 10 years on, the RSPO has not attracted the kind of support from consumers as initially envisioned.
Meanwhile, the anti-palm oil lobby has grown and the messages to consumers have remained the same: Palm oil = deforestation of primary rainforests = death of orang-utans.
The web of confused information fails to recognise that a solution exists, and needs consumer support in order to work. But a lot of the campaign messages are about boycotting palm oil. However far from solving the problem, this only serves to undermine the efforts of growers who have invested millions into sustainable practices while others may be discouraged from going through the efforts of certification.
Those who support a boycott, fail to grasp the bigger picture. With global demand for edible oils increasing alongside an expanding biofuels market, palm oil is here to stay. Compared to it’s closest competitors, palm oil uses up the least amount the land, whilst accounting for a disproportionately large output. Of the 258.18 million hectares used to harvest 10 of the world’s major oilseed crops, palm oil takes up 6%, whilst accounting for 30% of the world’s edible oils.
After their return from Sungkai, the four MEPs sat down for a dialogue session with local industry stake holders.
Datuk Carl Bek-Nielsen, vice chairman and executive director of United Plantations Berhad, is no stranger to speaking his mind when it comes to the RSPO.
His company became the world’s first certified producer of sustainable palm oil by the RSPO in 2008. Today, certified oils account for about 15% of global supplies for crude palm oil.
“It’s ironic that despite the push for RSPO certified oils, more than 50% of the world’s RSPO certified palm oil today, doesn’t have a home.
“Growers have made a backwards somersault trying to live up to these principles and criteria, but many of the big retailers and multinationals have since disappeared out that door like grease lightning,” he says.
The unwillingness to pay a small premium on certified oils sends an unhealthy message to growers, many of whom are beginning to question: why they should submit themselves to stringent RSPO criteria when no one is willing to pay a small premium for it?
The dialogue concludes the second last day of a week-long tour aimed at furnishing the MEPs with a better idea of the nuances surrounding the great palm oil debate. Organised by the MPOC, participants Julie Girling and Emma McClarkin from the United Kingdom, Krzysztof Lisek from Poland and Emilio Menendez Del Valle from Spain, were taken across the South China Sea to Sabah and Sarawak.
There, they met local forest and wildlife officials, environmental NGOs and Native Customary Rights (NCR) landowners farming under the Sarawak Land Consolidation and Rehabilitation Authority (SALCRA).
The MEPs and local stake holders seem to be in agreement about one thing: most consumers in Europe are not well-informed.
“The average man on the street isn’t going to know the ins and outs of the argument,” McClarkin had said to me in a conversation earlier.
“People need to know they are not going to stop palm oil from happening. Perhaps what we should instead be asking for, is to see the best agricultural practices in place.”
The recommendations the MEPs came up with were about finding a way to provide a bigger picture to the consumer.
“A lot of people just think that oil palm plantations are big bad corporations. The story of the smallholders needs to be told better. So does the story of sustainable certification. Consumers need to understand it in order to value and be willing to pay more for it,” says McClarkin.
MPOC chairman Datuk Lee Yeow Chor however, notes that as an outsider, there are certain constraints – such as that of perceived credibility. He raises the point of there being a corresponding obligation on the part of manufacturers, retailers and even NGOs (who are also members of the RSPO) to certified growers and mills, to help promote the use of sustainable palm oil.
“Unfortunately instead of promoting it, they either keep silent when something negative comes up, or join the bandwagon in casting negative aspersions on palm oil,” he says.
It’s a poignant point. In some cases, even manufacturers who do source sustainable oils, are weary of making this known. In the past, United Plantations Berhad have commented that this is why buyer information is kept confidential. There is a fear that regardless of whether a company is using certified oils or not, consumers may end up tarnishing all palm oil with the same brush.
In this sense, a polarisation in campaign strategies seems to be counterproductive. On the one hand, most seasoned NGOs, Greenpeace and WWF for example, have over the years come to focus efforts on pushing for sustainable palm oil.
However there are many smaller campaigns calling for an outright boycott. And manufacturers are responding, the Fairtrade chocolate company Divine, and Lush Cosmetics for example, announced they are cutting the oil out altogether. This is in turn harming efforts to get the whole supply chain to unite in promoting the their use of sustainable palm oil, along with any efforts to encourage people to stand up and be “palm oil proud”.
Girling thinks many manufacturers are stuck between a rock and a hard place.
“They don’t want to promote sustainable palm oil, because nobody has noticed they are using palm oil.
“And if nobody has actually attacked you for using palm oil before, it’s quite a tough call to actually draw attention to yourself,” she says.
Unfortunately, sometimes when opposition comes calling, the easiest thing to do is often to just take the product off the shelf, she says.
Girling, being a member of the Environment, Public Health and Food Safety Committee of the European Parliament is familiar with the issues. She has worked extensively on issues of food information for consumers in Europe, where there has been quite a strong lobby to have palm oil listed on food labels.
“But instead of trying to fight the fact that people are asking for palm oil to be identified, why not join that lobby ... and ask for sustainable palm oil to be included in the labelling,” she says.
Not everyone seems convinced that such a strategy would work however. Bek-Nielsen says that right now there is a lot of emotional rhetoric, versus informed decisions. Such are the challenges of the industry, especially in an era of social media where consumer pressure is a formidable weapon for campaigners. However, this has also ushered in the dawn of bite-sized information and most lay people don’t have the time or inclination to research complex issues.
Dramatic headlines become opinion formers and quick fixes – like boycotts – give immediate gratification.
Yet, demand for palm oil is increasing. The biggest markets for Crude Palm Oil are China, India, Pakistan and Bangladesh – none of which show the same sort of European concern about sustainably certified palm oil.
There are many criticisms of the RSPO, too. In particular, how to enforce its principles and criteria on members. But as its supporters say, Rome was not built in a day.
“In this digital world, we want things to take place right now, right here, preferably yesterday. But trying to instil this kind of change in the agricultural industry is like sitting on the back of an aircraft carrier and trying to move it around with a set of flippers,” says Bek-Nielsen.
“We haven’t got everyone on board, and if you heat up a bowl of popcorn, it will take a bit of energy before they all start going pop,” he explains.
“But eventually they will, start going pop pop pop. And there will always be a few corns that never go pop. But as long as the majority moves in that direction, we are working towards a positive change.