Oil Palm Frenzy

One of the single most frustrating part of introducing myself as a Malaysian, is being told that Malaysia is "No.1 in Palm Oil!". Then I would say something caustic to wipe that enthusiastic smiles of their faces. Unfortunately, there is this pervasive belief that Malaysia is a wonderful model to emulate in terms of becoming a world class producer of palm oil. At present, Philippines is number 6 but unable to produce enough to meet its own domestic needs. It is still a net importer of palm oil. 

The same sentiments were echoed by the officer in-charge of the Philippines Palmoil Development Council, Inc. (PPDCI) which is located conveniently in Tacurong. Here,  I obtained an investment brief pamphlet from PPDCI which propagates oil palm as "Asia's Miracle Palm Tree'. It was written by an academic, Dr Pablito P. Pamplona who expounds the benefits of oil palm as follows:-

1. For small holders who constitute more than 90% of Mindanao farmers to generate from a small piece of land high income above the poverty threshhold level.
2. This crop provides the best solution to overcome the worsening huge vegetable oil shortage of the country.
3. The crop has the ability to produce large quantities of oil for biofuel and its by-products organic fertilizers and as feed stuff to generate biofuel and electricity to help solve the energy crisis of Mindanao.
4. A unifying crop to help end the hostilities in Mindanao.
5. A tool for the peoples of Mindanao to actively participate effectively in the global effort to mitigate climate change. 

Source: 'Investment Opportunities And Challenges in the Palm Oil Industry'

Paper presented on 12th July 2012 by Pablito, Pamplona, Ph.D 

 

Dr. Pamplona is also the Secretary and member of the Board of Directors of the PPDCI at present. A lot of his writings can be seen on the official website, http://ppdci.org/council. 

 

In an effort to understand his arguments as put forth in his paper, I looked at some alternative sources which had a more critical view of oil palm expansion. This invariably led me to the Forest Peoples Programme (FFP) website. One of the newsletters I found held some strong arguments, entitled 'Making Palm Oil Accountable?' (http://www.forestpeoples.org/topics/palm-oil-rspo/news/2011/12/making-palm-oil-accountable).

 

Some of the salient points raised in the article was about Indonesia's  aggressive expansion to become the number one producer in the world.

 

'Latest data from the Indonesian watchdog, SawithWatch, suggests            that oil palm plantations now cover 11 million hectares, up from 6 million hectares only five years ago.' (FFP Newsletter 2011)

 

This would mean that a lot of farm land was converted into plantations because the economic viability of oil palm. This is also the case in Sultan Kudrat, where a lot of the land used previously for planting paddy and vegetables has been converted to oil palm. This raises a food security issue because as much as one can produce palm oil, it can not substitute for staple food like rice. 

Oil palm plantations have expanded exponentially in Mindanao specifically in areas such as Agusan del Sur, however it has not deterred violence as seen in the recent clashes in ARMM regions. 

Another observation I would like to make is the need for investment in terms of setting up mills is still limited in Mindanao. Big corporations like Augmil and KIDI own the only two operating mills in Sultan Kudrat and Agusan del Sur. Small holders/cooperative owned plantations still depend heavily on the mills to process their fruits. There is still alot of control exercised by these corporations in terms of determining the price of the fruit bunches sent to the mills. This is also highlighted by the FFP newsletter which cites Thailand as a good example of farmers negotiating for better prices for their fruits. 

FFP has done extensive research on the impact of oil palm plantations on people who have their rights usurped by capitalists. FFP also engages in intervention by working with marginalized communities in agitating for their rights, as well as hold these mega corporations accountable to the standards of the Roundtable on Sustainable Palm Oil (RSPO).