Why palm oil does not deserve its bad press

Bookmark and Share Food & Environment and Trade & IP Unit | Tim Wilson
New Straits Times 16th January, 2010

Recent campaigns against palm oil show non-governmental organisations are more interested in pandering to rich country donors than promoting sustainable economic and environmental development for Southeast Asia's poor.

Following attacks from palm oil industry interests in November last year, the chief executive of NatureAlert, Sean Whyte, claimed "Non-governmental organisations don't want to see it (the palm oil industry) closed down and neither are they seeking a boycott of palm oil", but to see it prosper without doing "damage to the environment".

In making such claims, however, Whyte clearly cannot see the oil palm from the plantation.

In Australia and New Zealand, NGOs have convinced celebrities, television stations and taxpayer-funded zoos to campaign for government regulation requiring manufactured food products to label palm oil ingredients separately from vegetable oils.

Their objective of mandatory labelling is to encourage consumers to choose products that don't contain palm oil and effectively introduce a consumer boycott.

The NGO campaign has had some success, with Australian Senator Nick Xenophon recently announcing he would introduce legislation directing the bi-national regulator, Food Standards Australia New Zea-land, to require compulsory separate palm oil labelling.

With mandatory palm oil labelling in force, supported by consumer boycotts, food manufacturers will be faced with the business reality of either losing sales or switching to other oils in manufacturing to keep customers.

It's a decision confectionery manufacturing giant Cadbury made last year after NGOs identified they were using palm oil in their chocolate products and encouraged a consumer boycott, leading Cadbury to dump palm oil as an ingredient.

In Europe, NGOs have gone one step further and successfully lobbied to introduce Europe-wide regulations blocking palm oil biofuel imports unless they meet strict emission standards.

In developed countries, NGO campaigns often prey on the ignorance of well-intentioned donors who aren't confronted with the consequences of NGO policies on out-of-sight and, therefore, out-of-mind rural workers.

NGOs then add images of "cute" orang utans whose habitats are claimed to be lost to palm oil-caused deforestation, to encourage donors to open their wallets.

But garnering donor sympathy to fight the palm oil industry comes at the expense of the exports and livelihoods of the more than 40 per cent of Malaysia and Indonesia's smallholder oil palm growers who rely on the crop for their incomes.

In total, at least two million Malaysian and Indonesian workers depend on the palm oil industry for their livelihoods, including from the large plantation communities that make up a majority of the planted oil oil palm, who don't just provide salaries for workers but also heavily, or wholly, subsidised healthcare, housing and education services.

Attacks on the industry also ignore the clear benefits of palm oil. At a side-event at the United Nations Copenhagen climate change conference, critics attacked palm oil because, like many other comestibles, it may contribute to the contraction of diabetes.

But palm oil is also a rich source of vitamin A and, according to the United Nations Children's Fund, each year a million infant deaths are caused by vitamin A deficiencies.

But there's no choice between accepting one million preventable infant deaths and allowing the consumption of palm oil that may lead to the contraction of a manageable chronic disease later in life.

And the crop is also substantially more sustainable in comparison with other oils because oil palm yields at least five times the same tonnage per hectare as equivalent seeds. As a consequence, oil palm needs less land and less resources to produce more.

The irony of the attacks on the oil is that if activists were successful in blackballing its use in food manufacturing, producers would have to switch to alternative lower-yielding crops to maintain their livelihoods. The consequence would be that they would require more land and more resources to produce less.

Palm oil isn't perfect and it is responsible for some deforestation caused by rogue growers. But the benefits of palm oil far outweigh the costs.

NGOs may think that eliminating consumer demand may remove the environmental consequences caused by the industry, but attacking the root of environmental degradation won't be solved by attacking palm oil.

Around the world, the key driver of environmental degradation is rarely a single industry, but poverty.

When urban and rural communities are poor, their best escape option is through the exploitation of primary natural resources that promote economic growth and drive the development of manufacturing and service industries.

Without the development of these industries, communities will always be trapped in subsistence living, where the environment will always come second to families finding ways to stay alive and secure food and shelter, especially in rural areas.

Protecting the environment only becomes a priority when societies prosper and can afford environmental protection regulation and the resources to sustainably manage and conserve their natural assets.

Anti-palm oil NGOs like NatureAlert, Greenpeace, Wetlands International and Friends of the Earth may think demonising palm oil will help Malaysia and Indonesia improve their environmental health.

But any short-term environmental improvements will be traded off against the livelihoods of the rural poor, who would be better able to protect their environment when they have economically developed and can afford to do so.