ISSN 2330-717X

Sustainable Palm Oil? How Environmental Protection And Poverty Reduction Can Be Reconciled


Palm oil is often associated with tropical deforestation above all else. However, this is only one side of the story, as agricultural scientists from the University of Göttingen and the IPB University Bogor (Indonesia) show in a new study. The rapid expansion of oil palm has also contributed considerably to economic growth and poverty reduction in local communities, particularly in Asia. The study was published in the Annual Review of Resource Economics.

For the study, the researchers evaluated results from over 30 years of research on the environmental, economic and social consequences of oil palm cultivation in Africa, Asia and Latin America. They combined the results from the international literature with their own data from Indonesia, which they have been collecting since 2012 as part of an interdisciplinary German-Indonesian Collaborative Research Centre (CRC 990).

Indonesia is the largest palm oil producer and exporter in the world. A large proportion of the palm oil produced in Indonesia is exported to Europe and the USA, where it is used by the food, fuel and cosmetics industries.

The research data show that the expansion of oil palm in some regions of the world – especially Indonesia and Malaysia – contributes significantly to tropical deforestation and the loss of biodiversity. Clearing forestland also leads to substantial carbon emissions and other environmental problems.

“However, banning palm oil production and trade would not be a sustainable solution,” says Professor Matin Qaim, agricultural economist at the University of Göttingen and first author of the study. “The reason is that oil palm produces three times more oil per hectare than soybean, rapeseed, or sunflower. This means that if palm oil was replaced with alternative vegetable oils, much more land would be needed for cultivation, with additional loss of forests and other natural habitats.”

Banning palm oil would also have negative economic and social consequences in the producing countries.

“It is often assumed that oil palm is only grown on large industrial plantations,” says Qaim. “In reality, however, around half of the world’s palm oil is produced by smallholder farmers. Our data show that oil palm cultivation increases profits and incomes in the small farm sector, in addition to raising wages and creating additional employment for rural labourers. Although there are incidences of conflicts over land, overall the oil palm boom has significantly reduced rural poverty in Indonesia and other producing countries.”

“The goal should be to make palm oil production more environmentally and climate-friendly,” says Professor Ingo Grass, agricultural ecologist at the University of Hohenheim and co-author of the study. “High yields on the already-cultivated land are important, in order to reduce additional deforestation. Mosaic landscapes, where oil palm is combined with patches of forest and other crops in agroforestry systems, could also help to protect biodiversity and ecosystem functions,” he adds.

The authors conclude that developing and implementing more sustainable production systems are challenges which require both innovative research and policymaking. Clearly and fairly defined land rights and improved access for smallholder farmers to training, credit and modern technologies would be important steps forward. Consumers can contribute by shopping for food, fuel, and cosmetics more consciously and avoiding waste wherever possible.

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One thought on “Sustainable Palm Oil? How Environmental Protection And Poverty Reduction Can Be Reconciled

  • May 20, 2020 at 7:49 am

    Your last sentence is vague. What do you mean by Consumers can help by shopping for food, fuel and cosmetics more consciously and avoiding waste wherever possible? Do you mean avoid purchases with palm oil in them?
    That palm oil is used for fuel is a crime and impossible for the average individual to “avoid consciously” as he doesn’t know that palm oil is often in the mix of bio fuels used as an alternative to fossil fuels. Food producers prefer palm oil because it is a vegetable oil that is solid at room temperature, avoiding the need to hydrogenate oils that aren’t solid at room temperature. As a result, palm oil has found its way into almost every baked good. And tropical forest habitats and ecosystems are being devastated.
    Though half of palm oil producers are small plantation owners, as you claim, the other half are large and powerful entities. Exactly which of the two, smaller farmers or the large plantation entities, do you think would survive if consumers stopped buying products with palm oil? Suggesting individual consumers make wise decisions will never be enough and is a canard. This problem, of tropical deforestation for palm oil, will require international governmental action.


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