The Problem with Palm Oil

07/12/2017 01:29 pm ET

The problem with palm oil is not so much that it causes deforestation in tropical countries and threatens exotic animals like the orangutans in Southeast Asia or gorillas in Nigeria with extinction. The problem is not even the frequent stories of land grabs and human rights abuses when it’s grown in large plantations.

The problem with palm oil is that it is such an efficient crop, that everybody wants in.

If coconut or olive trees could yield a similar harvest, we’d be talking about them instead of palm oil.

Oil palm fruit bunches
Malaysian Palm Oil Board
Oil palm fruit bunches

From the Philippines to India, it seems like everyone wants to own a piece of this vegetable oil. Their reason for wanting a piece of the palm oil pie is quite simple. It grows well in tropical countries with minimum care unlike other vegetable oils. Imagine growing a perennial flower that keeps returning year after year instead of an annual that needs to be replanted every year. The oil from the palm nut is also so versatile that it can be used for purposes from frying potato chips to making skin cream spreadably soft. Even powerhouse soy producer, Brazil is looking to add palm oil to its soy production rather than coconut or olive oil. However, the biggest attraction to palm oil today is that it’s a green source for energy that even small farmers can provide.

After decades of using fossil fuels and their climate changing emissions, one would think a green option would be welcome globally. So why does palm oil have such a dark image when it has the potential to provide an affordable cooking oil, empower developing countries outside of the Middle East and provide biofuels for rich countries? It all depends on who you ask.

There’s no problem with palm oil, its great stuff!

If you ask farmers in countries like Malaysia and Indonesia where most of the global supply of palm oil comes from at this time, they would say differently. There is no problem with palm oil. It grows well and has the support of both government and industry to plant even more. For poor rural folks in these countries, it’s like becoming Jed Clampett when they strike green oil on their land.

In a trip to Malaysia this May, I came across a pond with a jetty which was completely surrounded by young oil palm trees. I asked my friend what the deal was and apparently, the landowner thought he could make a business out of renting boats to tourists that wanted to fish or simply lounge around in a boat. That was until he heard about palm oil’s potential to make money. He promptly converted his land into a small oil palm plantation with the help of the local government. Rather than hoping that visitors would come and pay to play in his pond, he now sits and watches the daily rates for fresh fruit bunches of oil palm.

The price average in the current depressed market for vegetable oils was MYR500(Malaysian dollars) which is about USD120 per ton of oil palm fruits. That’s good money for local farmers in Malaysia. One can often see them flaunting their new found wealth with photos of themselves in sunglasses posing beside their new 4x4 trucks on Facebook. The low cost of living in countries like Malaysia and Indonesia is obviously a threat to rapeseed farmers in France as the country introduced a proposal to ban palm oil from its biofuel use.

Using the popular anti-palm oil tale of deforestation as a reason to ban palm oil from its biofuels, this move is being celebrated by France’s biofuels industry which uses French grown rapeseed. In a way, this move to protect French farmers from lower cost-to-produce products makes financial sense as it is cheaper than farm subsidies and earns votes as a bonus. We also have to remember that French farmers like farmers everywhere, are key to the sustainable development of countries whether it is to supply locally grown foods or biofuels. Until the day when renewable energy in solar or wind can provide real world solutions, biofuels have to be favored in a global transition away from fossil fuels.

As for the Malaysian or Indonesian palm oil industries grappling with anti-palm oil sentiment in France, I have a simple solution for them in the name of global sustainability. Demand that any French exports to Malaysia or Indonesia, whether brand name consumer goods or fighter jets, come with a guarantee to not add to global carbon emissions.

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