Interview – A boomerang on Africa: What if Europe bans palm oil imports?
Interview
Alain Rival, regional director for Southeast Asia island countries (Cirad)
For Alain Rival, regional director for Southeast Asia island countries at the French Center for International Cooperation in Agricultural Research for Development (CIRAD) and a specialist of the oil palm sector, the European Parliament’s RED-2 decision dated January 17 2018, which aims at phasing out, by 2021, the use of palm oil in transport in Europe, will have a counterproductive effect on the whole industry.
How can the ban proposed by the European Parliament on the import of palm oil into the European Union affect West Africa?
We entered a bad spiral. The European market is very qualitative and demanding: it is the only market (with the US and some other developed countries like Australia) that requires very standardized products for imports. If this European recommendation is passed, we will reach an extreme in control: the simple and abrupt ban of a commodity by Europe. We are now just at the beginning of the process since it is the Parliament that proposes but several European governments have voted against this decision because of its direct diplomatic and commercial consequences in the producing countries. We are at the beginning of a trilogue process between European Parliament-Governments-Commission, with a final decision expected by the end of June.
Could you remind us what is the European Parliament’s position?
The European Parliament wants to avoid by 2021 any import of commodities which are produced through deforestation*. Nevertheless the link between palm oil and deforestation is never direct nor automatic. Oil palm cultivation is one of the vectors of deforestation, particularly in South East Asia, but it is far from being the only one. Deforestation occurs first because of timber trade and then agricultural activities take place (or not) on cleared land. There is no evidence that any pressure on the palm oil sector will automatically result in a sizeable decrease in deforestation rates, just because vectors of deforestation are multiple and intricate: urbanization, mining activities, agriculture… If the legislator bans palm oil from the European market which is the most demanding one (for both the food and energy sectors) produced certified oil will then be downgraded and immediately absorbed by the growing Indian or Chinese markets. So the European market, which must be a model to pull the sector up, will face an immediate boomerang effect, as it will favor non-qualitative and uncontrolled markets which certainly carrying more risks of deforestation.
For us, at CIRAD, it is much more productive to engage in a positive circle and support certification efforts by setting up support programs in the producing countries in the aim of supporting the sustainability of production systems. If the national or international certification standards that qualify products related to deforestation are not sufficient, we must not forget that it is the role of Governments to endorse the dissemination, the application and the legal control of such standards, together with their efficient enforcement. The necessary sustainability of agricultural commodity chains is an idea which made its way rather quickly in producing countries, although such standards still need some improvement in order to make them more credible and widely accepted. In Côte d’Ivoire, Ghana or Cameroon, we are facing an oil palm sector which harbors a large majority of smallholders. If such players, who are often isolated, are to enter into a virtuous circle of improvement of their agricultural practices, like the use of selected seeds or ecological intensification, we need incentives and bonuses to promote such efforts. We also need qualitative markets that recognize producers’ efforts and give an extra value to certified sustainable palm oil. If this market is shunted by unilateral political decision, producing countries will turn to customers which are much less sensitive to sustainability questions, with an impact on deforestation that will be measurable.
The European decision will really have a boomerang effect: by totally banning a product that is certainly not free from defects with respect to deforestation – because, of course, there is no real zero-deforestation related to oil palm cultivation – but engaged in a virtuous process for nearly 15 years, we will get the opposite effect of the one sought. We believe that it is much more efficient to support smallholders and all stakeholders in the commodity chain in their efforts to achieve a credible certification level. As a research institution engaged in rural development in tropical countries, our role is to develop collaborative Research and Development programmes which results are shared common goods aimed at providing science-based evidence to promote changes in agricultural practices.
What about the controversy on the impact of palm oil on health?
At CIRAD, we are agronomists, not nutritionists, but some common sense arguments provided by lipid nutrition experts are worth listening to.
Palm oil is neither better nor worse than any other vegetable oil; it is the dose that makes the poison. It tends to be widely used in agri-food because of its remarkable physical and chemical characteristics. It is a natural butter that remains solid under European temperatures, which allows to be substituted for butter very easily. It is a vegetable oil with a neutral taste and it is cheap and abundant: this explains why it is so used in processed food.
What is the part played by palm oil in the European oilseed market?
Europe absorbs about 10% of the world palm oil market. It is the world’s second largest importer, behind India and comparable to China and half of imports are destined to biofuels. However, what seems illogical is that the will to limit the entry of palm oil into Europe emanates from the Parliament, whereas it is the same legislator who also decides on the rate of incorporation of biofuels in the European energy mix… It is above all a political decision because the incorporation of biofuels is always linked to fiscal policies driven by a government willingness to change the country’s energy mix. It’s the snake biting its tail: if Europe does not have enough vegetable oil to meet its biofuel needs, it will have to buy it from the global market where palm oil is available in abundance. The European protectionist temptation exists and we must not be too naive: Europe is also producing vegetable oils.
Will the West African consumer also shy away from palm oil?
Which consequences may have this European measure on palm oil projects in West Africa?
There is a definite risk of stopping a virtuous incentive mechanism for improving agro-ecological practices, recycling mill effluents, and selecting improved planting material. The oil palm is not an annual crop whose variety can be changed in the following spring. A smallholding farmer often inherits his parents’ plantation or he plants palms for his children, exploiting his palm grove over a 30-year cycle. Progress, when linked to planting material, can be rapid: when the plantation is renewed, growers have the opportunity to change for the type of seed planting material which is the most adapted to their system. Changes in agricultural practices are more gradual in time, because they are often related to the financial means of the farmer and his/her capacity to invest. Once again, if we remove palm oil from the European market which imposes both social and environmental conditions, we will remove all the incentives to change practices. We also must keep in mind that West Africa produces mainly for West Africa…
Africa is often described as the new pioneer front for the oil palm and foreign investors have already started many projects of plantation. These new projects are also opportunities to change practices. In Africa, adopting good practices and choosing the right planting material means going from 2 to 4 t/ha/year of palm oil on the same cultivated area. Young farmers and players in the palm oil sector in West Africa are already aware of this shift in demand towards products that meet strict criteria of sustainability and traceability. In addition, foreign industrial investors (traditionally French, English or and Belgian, now Malaysian, Indonesian or Singaporean) must meet very strict criteria for ethical investment, since financial tools are now linked to good agricultural, social and environmental practices. This evolution will not directly impact the small planters’ practices at first, but if the whole sector, (including the seeds’ market) is pulled up, benefits will be shared at some stage. No farmer will refuse to buy a seed because it is too good! So even if West Africa is not a major supplier and is virtually non-existent in the certified palm oil market, its players are also aligning themselves with this evolution of good practices.
Will West Africa, in search of productivity and mechanization, adopt large scale plantations, as in Asia?
No, I do not believe and I do not think that this is desirable: each continent, each country has its rural and agricultural history and must invent its sustainable exploitation system: biologically, the oil palm is a robust plant that will respond favorably to very different types of cultivation systems. In addition, the «small» planters constitute a family of very heterogeneous players in terms of assets, age or expectations, thus designing smallholders’ development strategy is often tricky and any copy/paste policy from other countries or agricultural landscapes bears very few chances of success….
Rather, there is a trend towards projects involving large plantations and small planters. If smallholders are properly supervised, if they adopt best agricultural practices, they often achieve higher productivity yields than large estates. Governments and finance bodies are more and more inclined to set up projects in which the central part of the harvesting basin (which is the nucleus of the plantation harboring the oil mill) is managed by an industrial plantation surrounded by a population of small planters who are associated – through direct contracts or otherwise – with this industry.
In West Africa, what complicates the scheme is the production of red oil and the self-extraction capacity of small-scale farmers, which does not exist anywhere else in the world, except in the Brazilian Nordeste. Indeed farmers, even under contract with an extraction plant, can also keep their fruits, extract the oil in a traditional way and put on the market another product – the red crude oil – which is increasingly demanded by urban elites. Therefore, the same palm fruit bunch has two outlets in direct competition during part of the year: if the purchase price by the middleman or the mill is not high enough, the small West African producer can do its own oil extraction. This competition is blurring the trade and trust agreements between the growers’ cooperatives and the mills. It will be difficult to persuade a miller to attach himself to a pool of smallholders when he knows that in peak production, when there are plenty of palm fruits and prices mechanically fall, farmers will not bring fruit bunches to the mill but will extract red oil by themselves. For small growers, this alternative is a strength because his income is no longer directly depending on a single buyer (and often to two or three middlemen). At certain times of the year, he will earn more money if he extracts and sells himself his red oil on the market of the neighboring city.
In West Africa, is it more profitable to grow oil palm, cocoa or rubber tree?
When comparing rubber tree and oil palm cultivation, the profitability per hectare can be of the same order in certain contexts, but in the immense majority of the cases, oil palm cultivation will bring more income, because its yield per hectare is exceptional and its requirement in workforce is comparatively lower. In South-East Asia, where you spend two days in an oil palm plantations, you will have to work for 40 days in a rice field to get the same income. The working time spared can be used for cultivating other crops including food crops, or for any other economic activities such as rural retail. In addition, the oil palm does not face endemic diseases which require massive pesticide application.
Are new technologies emerging?
Progress in mechanization is still marginal: it must be remembered that the palm is an herb, not a tree… Heavy agricultural machinery can hardly be passed between oil palms which root system is very sensitive to soil compaction. Most of field operations such as manuring or harvesting are still performed manually. So far, the problem of labor shortage in plantations has been shifted by importing workers from neighboring countries, who are still accepting wages offered by plantations, but for how long?
Research work undertaken by CIRAD and the national research organizations in the major producing countries is aimed at changing this planting system towards agroecology. There is still very little data available on agroforestry-type systems that would associate the palm tree with food crops, for example. The early stages of planting during which, for 3 years, smallholders do not harvest anything, must be the subject of focused research programs associating agronomy and social sciences.
Bénédicte Châtel
To go further:
Alain Rival and Patrice Levang (2014): Palms of controversies: Oil palm and development challenges. ISBN: 978- 602-1504-41-3 – DOI: 10.17528/cifor/004860
http://www.cifor.org/publications/pdf_files/Books/BLevang1401.pdf
