No Level Playing Field, Only More Rules

Malaysian oil palm growers and palm oil producers were hoping for more levelling of the playing field at the recently-concluded 7th Roundtable on Sustainable Palm Oil (RT7) in Kuala Lumpur, but they came away stuffed with more rules to follow.

The Greenhouse Gases (GHG) criteria, for one, almost led to a walkout from the meeting by growers, revealing cracks in the multi-stakeholder body which include growers, processors, consumers and environmentalists.

GHG is a bone of contention as the issue is complex, involving consequences for not only the environment but also from a social development point of view, especially within the sector involving smallholders who almost make up 40 per cent of palm oil producers worldwide.

“We cannot sell the future of our industry just for the sake of addressing global claims, unless there is a level-playing field which encompasses all agricultural operations and industries.

“Neither should we keep bending backwards to meet the stringent demands of the European Union market if they are not willing to acknowledge the concerted efforts being made by producers to comply with these standards, which today are arguably the most stringent for any agricultural crop when it comes to sustainability criteria,” remarked one participant.
More time is necessary to obtain the scientific data on GHG emissions. In the meantime, a second working group has been set up to look into the more complex issues such as compensatory measures, land use change and peat development.

As a result, the GHG criteria has become a voluntary, instead of a mandatory process, for the growers, thanks to the consensus which finally broke the stalemate during the meet in the packed conference room.

Roundtable on Sustainable Palm Oil (RSPO) president Jan-Kees Vis said while he was disappointed with the first working group’s failure to come up with a plan to address the issue of emissions, he also understood the frustration of oil palm growers.

Even leaders of powerful economies have yet to agree on the issue of financing of climate change mitigation measures in developing countries and pressure are building up leading to the planned climate treaty in Copenhagen in December.

At the same time, Malaysian palm oil producers, who have been scrambling to get their processes certified during the past nine months, were baffled to find out that the take-up of the certified sustainable palm oil from the European market was less forthcoming.

The price of premium oil, or CSPO, slid from US$50 (RM170) per tonne of CSPO to US$8 (RM27.2) per tonne last week and there is little for the producers to cheer as certification entails additional costs.

The World Wide Fund for Nature scorecard showed majority of European palm oil buyers had failed to buy CSPO despite their previous commitments.

Oil palm growers in Malaysia do not receive subsidies compared to farmers within the European Union (EU) where close to 42 per cent of the entire EU budget goes towards subsidising farmers through the common agricultural practice, the growers argued.

Meanwhile, environmentalist groups like Wetlands International, who was in the first working group, warned that if RSPO fails to develop criteria in relation to peat land and GHG, its credibility and future will be at stake.

The RSPO, which has come a long way since its inception, and the democratic process it instills in discussing issues through the multi-stakeholder process and arriving at a consensus, is too important to fail. Source : Business Times by Rupa Damodaran


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