By - Jamel Lahiani
Palm oil is native to West Africa. It is an important traditional crop with a variety of uses. But the palm oil industrial proliferation was in Malaysia and Indonesia in the twentieth century and has a strong impact to the rapid growth of those two countries. This last decade, African countries have been conscious about the palm oil industry and have moved to promote high scale plantation of palm oil in the forest zones. The question however is how to have the most benefit impact to the African countries?
The palm oil is highly required around the world because it’s cheap and it is very useful all the time. Its existent in all kinds of packaged food, from chocolates, crackers, snacks ice cream to instant noodles, and the rapidly growing consumption of processed foods globally is the big reason for the exploding demand. It’s also used in soap and cosmetics, in biodiesel, and as a mineral oil replacement.
Because of the importance of palm oil, many West and Central Africa countries engaged in its cultivation in the past decade to expand large-scale palm oil production. While some people have welcomed this in hopes it will bring economic opportunity and alleviate poverty.
The traditional palm oil crop remains a vital part of local culture, livelihoods and cuisine, and its artisanal production is controlled primarily by rural women. This generates revenue for the families and it has a positive impact to the dynamic of the demand and the markets.
The large-scale palm oil production has a more positive impact in term of revenue because not only does it create working opportunities and revenue distribution but also it is very efficient and creates a big quantity of production. The important quantity of production encourages the exportation and in return increase of foreign devise reserve for the countries.
In recent years, there have been emerging battles in the palm oil industry development. These are concerns about it impacts on: local water supplies, wildlife populations, biodiversity and climate change. But at the heart of the matter and what is making communities speak out en masse, is control over land. The palm oil companies try to expand to the tribal areas and hence land grabs. Peoples there do not like to be employed for a company in their tribal property because they are the owners of the lands.
Three side of propositions to have an equitable development of the palm oil industry:
A switch of African forest from diverse trees to the oil palm monoculture is very harmful for the environment. That’s why the “Roundtable on Sustainable Palm Oil” (RSPO) was created over a decade ago from partnership between stakeholders in the palm oil industry including producers, retailers and NGOs, to make the industry more environmentally and socially responsible. The RSPO-certified could be the solution for the protection of high-value forest and other areas. Some countries like Gabon, Sierra Leone, Liberia and Cameroon are engaged in this way. If the investors can’t apply the RSPO standard to get palm oil, they will just look for others activities.
At Tuesday, 24 April 2018 the RSPO Principles & Criteria (P&C) was interpreted for Nigeria. The RSPO Secretariat office, RSPO CEO Datuk Darrel Webber congratulated Nigeria and the Nigeria National Interpretation Working Group NNIWG on this achievement. “It’s crucial for local views and the context of sustainable oil palm agriculture to be adapted for different markets, particularly in Africa, where there is so much diversity within the continent itself,” Webber said. “The endorsement of the NGNI marks an important milestone for Nigeria, and we applaud everyone who was involved in the process.”
The contract farming model allows smaller plots of land for local farmers to cultivate palm trees independently. It allows, in other words to create employment opportunities for farmers.
The out-grower model is encouraged in Sierra Leone and Liberia, the idea is that the companies still get the output required, and at the same time create out-grower opportunities for small farmers. They have jobs year-round, and the smaller farms do not have the same impacts on water supplies or use chemicals as intensively as the large plantations do.
The graphics below give us that the world production of Palm oil increases rapidly to reaches 76.014 Million Metric Tons in 2019. In fact, many countries are engaged in the large-scale palm oil production. But, the world consumption of Palm oil increase slowly that why the prices fell from 2011 to 2019.
What will happen if prices return to the lowest level of 2001: 185 $ per metric tons. Will the production still be profitable in that price subject to production cost? How we can prevent the surge of a crisis in this industry?
Necessary, the diversification of plantations can be the solution to avoid the crisis.
The Palm oil industry is a good avenue to create opportunities for farmers in Africa and can assist to alleviate poverty in the region. But only the application of a good Sustainable Palm Oil standard, the selection of an equitable contract farming model and a profitable market price can maintain a sustainable and equitable development of the Palm oil industry.
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