The Oil Palm Dilemma: What It Means for the People and the Forests
An analysis of how the palm oil industry has changed the landscape of Indonesia’s archipelago and how to improve the business practice for a sustainable future.
By Sunarto*
*) Research Associate, Institute for Sustainable Earth and Resources, Universitas Indonesia | Twitter: HikeIndonesia\\
“Sebiji brondolan, nyawa bagiku”
(A piece of oil palm fruit is a life for me)
This short yet touching phrase was written firmly on a simple wooden board embedded in a smallholder oil palm plantation in Indragiri Hulu, Riau, Sumatra. Brondolan is a term used by farmers for a single palm fruit that falls out from its bunch.
That phrase represents the special relationship between most smallholder oil palm farmers and the commodity today.
Oil palm is not just an ordinary commodity. Known scientifically as Elaeis guineensis, the plant is more than a lifeline for them. Assuming an average production is two tons of fresh fruit bunches per hectare, with each priced as IDR 2500 per kg, palm oil can produce IDR 5 million per hectare per month. After deducting the production costs, farmers can still get around IDR 3–4 million, depending on conditions. Although the production costs are relatively expensive, this figure is much higher compared to, for example, the net yield from rubber plantations which is reported to be only around IDR 1 million per hectare per month. Such a simple calculation does not account for externality costs or benefits associated with each of the commodities.
No wonder every oil palm farmer fights hard to make sure their oil palm plantations thrive. A popular local radio station in Pekanbaru, the capital of Riau Province, once broadcasted a conversation regarding the importance of oil palm in the social realm. “How many hectares of oil palm that you have?”. The answer to that question is something that your prospective parents-in-law consider. In many cases, it is deemed equal or even beats academic degrees and titles.
“For outsiders of Riau, this may sound strange. But, it is actually a fact since I experienced it myself,” said Harry Kurniawan, 42, a bachelor who is a resident of Pekanbaru. “If you have ten hectares of oil palm plantation, then no doubt you’ll be considered to be well established by the prospective in-laws,” added the civil engineering graduate from a reputable university in Riau.
Harry’s story illustrates the intimate relationship between people and oil palm, a plant species that originated from Africa that has changed the landscapes of the Indonesian Archipelago in the last century. However, this story is only one of the many dimensions surrounding the industry.
Forests have been cleared, with or without a legal permit, because of oil palm. This species replaces the extremely rich biodiversity of tropical rain forests or agroforests in Sumatra, Kalimantan, and finally Papua. Not infrequently, indigenous peoples are also marginalized as a result of oil palm expansion. Several species of large mammals such as elephants, tigers, and orangutans are also threatened due to habitat loss.
The condition of the field has led to the anti-palm oil campaign becoming widespread on a global scale. In Europe, the label “palm oil-free” is used as a campaign slogan targeting consumers using an image of palm oil as the destroyer of the environment.
However, studies on vegetable oil production show that such outright rejection is unlikely the best approach. Compare with other sources of vegetable oil, oil palm is the most productive when it comes to the land area needed to produce the same quantity of oil. So instead of rejecting palm oil, we should push for improved governance and practice of the industry, and ensuring the balance of the ecosystem could be the better measures to do so.
In this article, I will invite readers to explore these dilemmas and eventually present the case for sustainable palm oil. I believe it is the middle ground to ensure both economic viability and environmental recovery.
Let’s start from the historical aspect.
The origins of oil palm
The use of palm oil as a source of oil for human consumption initially originated from West Africa more than 5 thousand years ago — approximately 3000 BC. In 500 BC, the people of West Africa developed oil palm cultivation on a fairly large scale with the practice of burning forests (slash-and-burn). The development of oil palm at that time was also believed to have been one of the factors that supported human migration and the development of agriculture and civilization.
In the colonial era, Europeans began to bring palm oil out of Africa. In the 18th century, through the slave trade, oil palm reached the hands of a French botanist named Nikolaus Joseph von Jacquin. Von Jacquin described oil palm as a monocot plant; a group of like grass or bamboo. In a publication entitled Selectarum Stirpium Americanarum Historia, he classified the plant into the family of palms (Arecaceae).
Unlike other types of palms, oil palms produce fruits that contain a lot of oil. There are two types of oil produced: Crude Palm Oil (CPO) and Palm Kernel Oil (PKO). The first type, obtained from the reddish flesh of the fruit is usually used as cooking oil. While the second type, which is obtained from the white kernel of the palm kernel, is usually used in the process of making soap, cosmetics, and several types of food products such as a mixture of butter, chocolate, and creamer.
Not only to supply the needs of the slaves, but palm oil has also finally succeeded in attracting the European market. At that time, there was an increasing demand for fats and oils. European society was thirsty for fats as lubricants, raw materials for various manufactures, fuel for lamps, and materials for making various products from candles to soap. Prior to the availability of palm oil, the need for oil was generally obtained from animals such as pigs, cattle, whales, and fish.
Palm oil for the European market in the early 19th century was solely supplied from Africa, which generally relied on wild oil palm and small-scale plantations. However, the demand soon increased after the Europeans learned about the variety of products that could be produced from it.
Responding to this demand, Dutch businessmen began to bring palm oil to the Dutch East Indies (Indonesia). In 1848, four oil palm seedlings were planted in the Bogor Botanical Gardens. Several years later (1850–1860), saplings from this oil palm plant were then planted as ornamental plants in Deli, East Sumatra, an area that surrounds the city of Medan today. Unexpectedly, oil palm thrives there. In 1910, oil palm began to be cultivated on a large scale in Deli and then expanded to other areas in Aceh and North Sumatra (around 5000 hectares). At the same time, the Deli-Dura variety of oil palm was developed.
The Changing Landscapes
After the Indonesian independence, the palm oil industry continued to grow. In addition to Aceh and North Sumatra, oil palm has begun to expand to the south of the island, namely towards Riau and Jambi, where about 50% of the area used to be natural forests.
Oil palm plantations also extended to Kalimantan and often use peatlands that store millions of tons of carbon. Scientists argue this carries a fundamental risk to the ecological safety of the land concerned. Suria Darma Tarigan, a soil scientist at the Bogor Agricultural University (IPB), in a webinar on the science of oil palm said that clearing peatlands for agriculture in any way would trigger the release of high emissions. In Papua, oil palm has also begun to replace the expanse of virgin forest which is a habitat for unique and endemic animals such as the bird of paradise (the Cendrawasih).
According to the analysis of the Geospatial Information Agency (BIG), the area of oil palm plantations in Indonesia in 2018 has reached 17.9 million hectares. Areas with extensive oil palm plantations include Riau, North Sumatra, Central Kalimantan, West Kalimantan, South Sumatra, East Kalimantan, Aceh, and Jambi. This area is more than 25 times the size of the island of Bali. According to the Central Statistics Agency (BPS), most of the oil palm plantations (54.42%) are large-scale private plantations, followed by smallholder plantations (41.35%), and the rest are large state plantations (4.23%).
Unfortunately, many of them are classified as illegals, including those planted in forest areas covering an area of 3.47 million hectares, an equivalent of six times the size of Bali. As reported several times by Eyes on the Forest (https://www.eyesontheforest.or.id/) and other sources, these violations are not only committed by small farmers but also large corporations.
“Piado rimbo, piado bungo”
There is a massive price to pay for the oil palm expansion and it is the indigenous people who depend on the forest that have to pay the most. According to Irma Tambunan, a journalist for Kompas daily, the Orang Rimba are the most affected communities. “Because their living space has changed into a monoculture of palm oil,” Irma said. Orang Rimba previously lived exploring and depended on the sustainability of around three million hectares of lowland forest in Jambi. However, most of their living areas have now been turned into industrial forestry or agricultural plantations, in which oil palm dominates.
In her report, The Disappearance of the Flowers of the Jungle, Irma recounted the bitter saga of Orang Rimba witnessing the entry of dozens of heavy equipment into the forest in the 1970–80s. To them, the sound of the engines is more deafening than the roar of a tiger. Residents run scared. Orang Rimba have then been evicted from clearing palm oil. In her book Keeping the Last Jungle, Mardiyah Chamim, a Tempo Magazine journalist, said that replacing forests with oil palm has destroyed the culture and livelihoods of Orang Rimba because “Piado rimbo, piado bungo. Piado bungo, piado dewo” (No forest, no flowers. No flowers, no blessings in life).”
However, the palm oil industry does not seem to pay much attention to the complaints of the indigenous peoples. The increasing number of the world’s modern population increases the demand for versatile vegetable oils, and palm is the answer. Palm oil is versatile to use for the manufacture of food and beverages, cleaning agents, cosmetics and personal care, bioenergy and fuel, animal feed, fertilizers, medicines, and various other industrial needs. Simple research indicated palm oil is used in about 50% of consumer products marketed every day.
The Trade-off
On the one hand, the conversion of forests to oil palm plantations does increase the economic value of harvestable biomass. But on the other hand, the process has costly consequences for the environment. This is evidenced by a multi-disciplinary study involving scientists from various countries, including one from Lund University in Sweden and Jambi University in Indonesia.
The study analyses changes in ecological function in the lowland Sumatra by observing several different ecosystems: rainforests, smallholder rubber areas (mixed with other forest species), rubber plantations, and oil palm plantations. The result suggested several environmental aspects — such as the level of biodiversity, soil quality, stored biomass, and climate stability — were decreasing in monoculture plantations such as rubber and oil palm.
In addition to being poor in species, oil palm plantations are also very simple in their vegetation structure. This area is characterized by the dominance of a single species, with a uniform age structure and shape. Not many niches are formed here so only a few other species can take shelter under them.
Chemical fertilizers used in large-scale oil palm plantations have also resulted in a dire impact on water quality and chemical processes affecting the soil. Fertilization is one of the key measures in oil palm cultivation since soil fertility will decrease in a few years after land clearing. “Nitrogen fertilizers in oil palm plantations are associated with nutrient decay which has a negative impact on groundwater quality,” Clough wrote. A number of oil palm communities in their research reported the scarcity of water for washing, cooking, and bathing.
With such characteristics, the clearing of oil palm in certain areas — such as the living spaces of forest-dependent communities, key wildlife habitats, riverbanks, peatlands, and hills — risks the increase in conflict and disaster.
Studying the Dilemma
With both advantages and challenges, palm oil is one of the most debated agricultural commodities in the world. There are two sides of the pole that is unlikely to ever meet. On the one hand are supporters of oil palm plantations who cheered on arguments ranging from economic benefits to nationalism. On the other, those who argued of oil palm harmful impact on health and environment.
It is pertinent for the public to be critical of both arguments. It is important to note that each side carries undeniable facts. At the same time, there is also a lot of distorted or biased information due to various interests from all the parties involved.
On the one hand, palm oil is clearly needed and can hardly be separated from the daily needs of modern society today. In 2019, global market demand for palm oil was reported around 75 million tons. Indonesia’s CPO production of 48 million tons contributed more than half of it.
The demand for palm oil continues to increase over the years. Its claim on the ability to produce vegetable oil 3–8 times than of other crops, palm oil continues to be the unmatchable source and producer of vegetable oil.
Compared to vegetable oils from other types of plants such as canola, corn, soybean, and sunflower, palm oil contains more saturated fat which is more resistant to the oxidation process that occurs during the frying process. Palm oil is also claimed to not contain trans-fat, one that is currently considered most hazardous to health.
Aside from cooking and other human consumptions, palm oil also serves as biofuel. For years now the Indonesian government has continued to add to the bioenergy mixture in fuel sold at gas stations using palm oil as the main raw ingredients.
On the other hand, the impact of the palm oil industry on environmental degradation cannot be ignored. The decline in environmental quality by oil palm expansion occurs mainly because of the agro-industry model that is currently developing across the archipelago. It is run by planting oil palm as a monoculture commodity and thus replacing a natural land richly covered in biodiversity typical of the archipelago that used to be of natural forests or mixed plantations.
It takes a village to raise a child
In a relatively short period of time, oil palm has now become one of the most influential species and has most significantly changed Indonesia’s landscapes.
Thanks to the early spread agents and nurturers, namely the Europeans, oil palm found fertile soil in the lands of the Archipelago. Global demand in the last century has driven the expansion of monoculture plantations to replace biodiversity-rich mixed forests and gardens. Endemic animals are losing their habitat. Forest villagers have lost their jungle. Leaving this to the business-as-usual attitude without serious efforts to improve is like committing ecological suicide (ecocide).
Also, it is obvious that palm oil is a much-needed staple for today’s world since it fills the niche created to support human “civilization” thirsty for a large supply of vegetable oil.
But between the two opposite poles, there is hope for a middle way to take to ensure the palm oil industry can continue to supply the community’s needs for healthy and environmentally friendly products where the keyword is “sustainable”.
Currently, there are several mechanisms and improvement efforts to the conventional oil palm plantation that have shown encouraging results but generally are still on a relatively small and limited scale. Examples include identification and protection of areas important for conservation, implementation of improved management practices (Better Management Practices), implementation of sustainability-related certifications such as the Roundtable on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), and a few others. In addition, various ecological-based fiscal transfer mechanisms are also being developed, including the schemes to reduce emissions or absorption of greenhouse gases, carbon tax or offset, and several others that will be able to provide financial incentives for planters making the efforts to improve the ecological and environmental state of his/her area, including in its mitigation to the climate crisis.
To implement this middle ground on a wider scale, the government needs to create a regenerative business ecosystem, applying coherent policies to drive business innovation leading to a faster environmental recovery. The management of the palm oil industry needs to be improved all the way from upstream to downstream to restore environmental conditions and promote recovery of the biodiversity. Restoring the carrying capacity of the environment as well as rehabilitating various areas that should be protected but have been damaged, such as conservation/protected areas, peatlands, and river border areas or riparian areas, is urgently needed. Studies have indicated when plantation management is improved by taking environmental aspects into account, plantation areas can grow into additional habitats, stepping stones, and corridors for the movement of animals and biodiversity.
As the saying goes, it takes a village to raise a child. Improving the governance of the palm oil industry is like raising and nurturing children. It takes the willingness of various parties to cooperate as a community. This needs to start with a common intention to improve the current situation towards better circumstances in the future.
The key step is to create a healthy business ecosystem, built upon solid restorative policies, and provide incentives for efforts to recover and strengthen our natural capital. The communities, consumers, in particular, need to be concerned, are actively involved, and continue to support and provide encouragement for any improvement efforts made. If these conditions are met, business actors will certainly compete to develop various innovations that will not only generate financial benefits, but also environmental recovery and a sustainable economy***
