More Palm Oil for Hungry World

FOOD SECURITY: Cooking oil importing countries must reject calls by WENGOs to restrict expansion of oil palm plantations, writes Ooi Tee Ching

UNITED Nations’ Food & Agriculture Organisation (FAO) recently warned that world food prices are on the rise again.

In February 2012, the food price index rose one per cent – the second increase in two months. It was mostly driven by costlier sugar, oils and cereals.

At the current level, the food price index is just 10 per cent below its peak in February 2011.

The FAO report said the 2011/12 market points towards a paltry 1.5 per cent increase in global oils and fats production to 181 million tonnes. Demand, however, is anticipated to expand five per cent to 184 million tonnes.

With global demand forecast to outstrip supply, the stock-to-use ratio is seen to fall below 15 per cent – close to the critically low level of the 2008’s food crisis.

In an interview with Business Times, Malaysian Palm Oil Board chairman Datuk Seri Shahrir Samad said, “This is a timely reminder for the cooking oil importing countries around the world to reject calls by western environmental non-government organisations (WENGOs) to restrict expansion of oil palm plantations.”

He said palm cooking oil has done more to enhance food security than any of the other vegetable oils, on a global scale.

Last year, Oil World journal showed world exports of all vegetable oils stood at 68.21 million tonnes. Palm oil accounted for 61.3 per cent of the global market share while rivals like soyaoil only command 10 per cent and rapeseed oil, five per cent.

Currently, oil palms are cultivated in southeast Asia, Papua New Guinea, Central and West Africa and Latin America, all of which are developing countries in the humid tropics.

“The trees are planted by some 10 million farmers across the equatorial belt of the globe. At the same time, it feeds billions of people in China, India and other developing nations,” he said.

FAO’s update made a stark reminder that nearly a quarter of the world’s population continue to live on less than US$2.00 (RM6) a day.

If the world is going to address the growing issue of food security, Shahrir said, a strategic move would be to plant more efficient oil crops like oil palms.

The yield from oil palms is seven times higher than rapeseed a hectare and ten times that of soya- beans. In terms of energy balance, it takes less sunlight to produce a unit of palm oil than any of the other vegetable oils.

At the recent Roundtable of Sustainable Palm Oil (RSPO) meeting held in Kuala Lumpur, resolutions put forward by oil palm growers were outvoted.

Now, many planters feel the RSPO has deviated from what it was set up to do. It has instead become a big boys club for multinational consumer goods companies and WENGOs.

From the start many Malaysian and Indonesian plantation companies have spent tens of millions of dollars to meet WENGOs’ definition of “sustainable palm oil” but the promise of a US$50 (RM150) a tonne premium over market price was never met.

When asked to comment, Shahrir pondered for a while and sighed.

He cited that Milton Friedman, a renowned economist, once said “the social responsibility of business is simply to maximise the rate of returns to the general shareholders, consistent with the law. Anything that sidetracks corporate management from that responsibility spells big trouble”.

The bottom line is tens of millions of corporate dollars have been and continue to be diverted away from investors and redistributed elsewhere – not by duly constituted governments – but as a result of the power of extortion wielded by wealthy WENGOs and their affiliates who are accountable to no one but their “well-meaning donors”.

“It is sad,” Shahrir said, “that many of these WENGOs have managed to execute corporate coup d’etats in dictating business policies and behaviour based on their definition of what is sustainable, equitable and fair for Malaysian taxpayers.”

For example, the Malaysian government had allocated RM50 million of taxpayers’ money to help smallholders fulfil “sustainable standards” defined by WENGOs in the RSPO.

With the involvement of taxpayers’ money, Shahrir noted, Malaysians are dragged into a global vegetable oils trade war waged by these WENGOs over the democratic values that we cherish – individual freedom, open markets, private property, and progress.

Shahrir opined that the current contention by WENGOs that RSPO-certified palm oil must be used in their home countries, namely; the US and Europe, is a big disservice to the millions of small oil palm farmers in developing nations who aspire to have fair access for their produce into the world markets.

Smallholders in developing nations have similar aspirations to those of developed countries.

But smear campaigns against the oil palm industry and harassment to cough out big amount of money to be RSPO-certified lead to a restricted market access for palm oil.

“Why should our smallholders contend with trade barriers disguised as environmental protection erected by green activists of developed nations?” he asked.

Shahrir, who is also Member of Parliament for Johor Baru went on to question the logic of allowing backdoor legislation. “Why should our oil palm industry submit to principles and criteria governing our country’s land resources that is being pushed by green activist-driven organisations such as the RSPO?

“Where is the respect for Malaysia’s laws enacted by Parliament and state assemblies that had shaped good agriculture practices, workers rights and sustainable return on investments for farmers?”

Shahrir observed that the select few but financially strong WENGOs within RSPO often justify their tactics by claiming to be stakeholders of tropical rainforests.

Indeed, green groups can play an invaluable role in highlighting overlooked environmental problems and stirring public, and even government oversight.

But that is a far cry from self-declaring stakeholders status and hoodwinking corporations into making uninformed decisions that is slowly but surely retarding the growth of the oil palm industry.

Shahrir went on to say green protectionism that is being practised by WENGOs and their paymasters actually inflicts huge risks to economic growth in both the developed and developing world, alike.

For the developed countries, the cost is to industries which rely on imports to be competitive, and consumers who will spend more of their disposable income on less.

For the developing world, the cost is denial of natural resources development and therefore, poverty perpetuation among farmers. “Yes, money is not everything. But when you don’t have it, it could mean hunger and death,” Shahrir said, with a heavy sigh.

Source:Business Times by Ooi Tee Ching

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