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Cover Story

T
he best planned sustainable
practices would be no more than
wishful thinking if these cannot be
translated into good agriculture practices.
Having spearheaded extensive research and
development in oil palm cultivation,
Malaysia has long advocated sustainable
farming practices. In this, it has struck a
balance between commercial and economic
needs and preservation of the environment.
GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 2006
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Malaysia has long turned
concept into action for
sustainable production of
palm oil
Bako National Park, Sarawak
Photo: MTC
Laws including the Protection of
Wildlife Act 1972 were already in place
when the industry saw a surge in planted
area from the 1980s. Unfortunately,
opponents of the industry and NGOs
who claim to fly the flag of sustainability
have failed to take note of legally
mandated checks and balances toward
sustainable development.
The hysteria generated is mainly a
distortion and manipulation of facts or
good practices long adopted. However,
the allegations were firmly refuted during
a symposium on Sustainable Resource
Development, hosted by the Malaysian
Palm Oil Council (MPOC) in London on
May 18. NGO representatives at the
event eventually acknowledged that their
efforts were not targeted at Malaysia
whose palm oil polices are more eco-
friendly than those of other producers.
How could the NGOs have alleged that
Malaysian palm oil is not sustainable?
Why did they portray palm oil negatively
and encourage consumers to avoid such
products? Judging by the unsustainable
performance of the UK and EU
agriculture, it would have been more
logical for them to tell consumers to
boycott their own farm produce, the
sustainability of which is far below that of
Malaysian palm oil.
Forest cover
NGOs have claimed that the destruction
of rainforests in Malaysia is due to the
expansion of oil palm and that such
activities have endangered the existence of
some species of flora and fauna. But such
accusations cannot be applied to oil palm
in terms of agricultural practices in the
UK and the percentage of Malaysian land
devoted to forestry, agriculture and oil
palm.
Overall green cover, including
untouched forests and agriculture areas,
GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 2006 7
Climate is a key determinant in the
extent of natural tree cover, which
flourishes in the equatorial conditions of
Malaysia - uniformly high temperatures,
humidity and rainfall.
Source: MTC
Source: FAO, Global Forest Resources Assessment, 2005
With 185,000 known species of fauna and
12,500 species of flowering plants,
Malaysia ranks as one of the twelve
mega-diverse countries.
TREE COVER IN MALAYSIA COMPARED TO
SELECTED COUNTRIES
occupies a stunning 76% of Malaysias
land mass of 32 million ha. This is far
greater than the green cover of which
most developed economies can boast. Yet,
the loudest noise is made by those from
nations that have long devastated their
own green cover and are actively
contributing to global warming by
emitting various pollutants from
industries and wasteful lifestyles.
Forests, including someof theworldsoldest
virgin rainforests, account for 60% of
Malaysias land mass. According to FAO
data, the UK has less than 12% of land
under forest, with the rest having been
converted to agriculture.
Agricultural land in UK makesup 70% of
the total land area. Despite Malaysias
emergence as the worlds largest producer
and exporter of palm oil, it hasbrought less
than 19% of the land mass under
agricultural crops. Of this, two-thirds or
only 4 million ha are under oil palm
plantations. This has not led to reduced
biodiversity and lossof fauna and flora under
oil palm cultivation as several NGOs have
claimed.
If forest conservation for environment
sustainability is truly their aim, they
should campaign for agricultural land to
revert to forest EU and UK agriculture
would be their most appropriate target in
view of abuse of land by planting rapeseed
for bio-fuel, when this could be converted
to forest. The energy balance for rapeseed
bio-fuel is negative, (more energy is spent
to generate one unit of bio-fuel energy,
besides contributing to more carbon
dioxide emission).
The EU or UK should ideally follow the
Malaysian standard of 50% of land
under forest cover, by converti ng
agricultural land into forest to generate
conditions of higher conservation and
biodiversity. The goal should be to
reduce agricultural land use to less than
20% as practised by Malaysia.
Reducing global hunger
With the world population projected to
grow from 6.5 billion in 2005 to 8 billion
by 2028, demands on all food
commodities are expected to strain global
land resources. Managing hunger has
emerged as a major challenge for all
including the FAO and WHO.
Fats and oils are macro nutrients that
must be provided in sufficient quantities
and at affordable prices to ensure a
healthy diet. Fat is a concentrated form of
energy which is recommended at the
minimum level of at least 20% calories.
Unfortunately this target is not being
readily met in the poorer economies.
The palm oil industry is meeting the
challenge to provide a suitable and
sustainable edible oil supply. It is difficult
to imagine those global commodities
markets that are not adequately supplied
by palm oil. It is in this context the oil
palm shows most promise as a sustainable
crop.
With only 0.4% of the worlds
population, Malaysia produces 11% of
GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 2006 8
Photo: IJMP, CedePrudente
GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 2006 9
the global vegetable oils as well as
accounts for 29% of export trade in oils
and fats. This is carried out on 1.84% (4
million ha) of the total area (216 million
ha) under global oilseeds cultivation.
Oil palm has been demonstrated to be the
most efficient and biologically superior
oilbearing crop in terms of land utilisation
efficiency and productivity. Average oil
yields are 3.66 tonnes/ha/year, while that
of other oilseed crops pale in comparison
(soybean, 0.36 tonnes/ha/year; rapeseed,
0.60 tonnes/ha/year; sunflower seed 0.46
tonnes/ha/year).
Only 9.2 million ha of agricultural land
need be devoted to oil palm to produce
31.8% of the global fats and oils output.
For a similar output, soybean cultivation
requires92.54 million ha.
Thus, if the target is to feed the growing
world population and better utilise
available land for cultivation, it makes
good sense to look at palm oil as a
sustainable commodity. In addition,
research strategies have focused on
improving yields, projecting an output of
up to 6 tonnes/ha/year within the next
decade.
Scientific evidence
The acreage under Malaysian oil palm has
released approximately 85 million tonnes
of oxygen through photosynthesis and
related activities. In contrast, the entire
agriculture land of 17 million hectares in
the UK has generated only 43.5 million
tonnes of oxygen or half that of
Malaysian oil palm cultivation.
Carbon dioxide levels are already at their
upper limits of acceptability in the
Western Hemisphere due to the use of
more fossil fuel and the lack of adequate
green cover. Oil palms carbon dioxide
absorption/sequestering power amounts
to 117 tonnes versus 60 tonnes for the
UKs entire range of agricultural crops.
It should therefore come as no surprise
that the oil palm is unsurpassed in its
ability to generate oxygen and effectively
absorb carbon dioxide for the benefit of
the world population.
The Carbon Cycle
The carbon cycle illustrates
how plants and animals of
the rainforest rely on each
other for survival. Fast
growing young trees
convert carbon dioxide to
organic matter via
photosynthesis. In turn,
carbon dioxide is released
by living organisms into the
atmosphere through
respiration.
Sustainable
Oil Palm
Development
Economic productivity
In 2004, the UK received Euro 4.06
billion for subsidies to support its
agriculture sector, which earned Euro
24.72 billion per year. This produced an
earning of Euro 1,448/ha, of which Euro
238 was the subsidy component, leaving
net revenue of Euro 1,210/ha per year. In
the same year, the Malaysian palm oil
industry earned Euro 6.53 billion per year
or Euro 1,687/ha of revenue yearly, which
exceeded the UK agricultural unit
earnings.
If purchasing power parity is applied to
revenue, the Malaysian palm oil industry
is far superior to that of UK agriculture in
terms of the sustainability indicators.
Without the subsidy, EU agriculture
would be totally unsustainable. The
subsidy contributes to environmental
damage due to the over-use of fertilisers
and pesticides, and the inexorable
destruction and removal of forests.
Compared to the major annual oilseed
crops planted in the US and the EU, each
hectare of oil palm produces 10 times
more oil with fewer resulting emissions
and pollutants. Combining such natural
efficiency and a productive lifespan of 25-
30 years ensures a sustainable and steady
supply of an essential food commodity
that feeds millions.
The sustainability of the Malaysian palm
oil industry is therefore obvious, and it
can be safely claimed that cultivation is
comparatively superior to any large scale
agriculture in the tropics or the temperate
countries in terms of sustainability
parameters. The plantation industry is
professionally managed, with many
companies being listed on the Malaysian
stock market, and practising
corresponding requirements of corporate
governance and corporate responsibility.
Demonstrated commitment
While it cannot be emphasised enough
that Malaysian palm oil is produced using
sustainable practices, the industry is open
to collaboration to enhance its high
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Cover Story
For any development to be sustainable, it should be:
economically viable
socially acceptable
environmentally compatible
technologically appropriate
standards. To underscore its seriousness,
Malaysia has launched a Palm Oil Wildlife
Conservation Fund with an anticipated outlay
of RM20 million. This will fund ideas and
proposals to enhance biodiversity linked to palm
oil production worldwide.
NGOs, meanwhile, are calling for plantations to
join the Roundtable on Sustainable Palm Oil
(RSPO), which has yet to establish official
certification procedures. Malaysian palm oil
should mostly qualify within currently
acceptable parameters of sustainability.
Any call for the boycott of unsustainable palm
oil would be premature and difficult to
implement in the absence of certification. After
all, there are no sustainable oilseed products
from the EU, raising the question as to why
these are not being boycotted.
The RSPO is a novel idea, supported by the
Malaysian palm oil industry, but its
implementation should be further researched
for consensus between the participating
suppliers and buyers.
Indeed, the challenge is now for other oilseed
and food crop producers to take up the concept
of a Sustainability Roundtable. It will be
interesting to see if they can achieve sustainable
standards of production already achieved in
Malaysia.
Dr Yusof Basiron
CEO, MPOC
Thisisarevised version of apaper presented at theMPOC symposium.
Photo: MTC
11 GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 2006
A river flowing through the
dense forest of Taman Negara,
Malaysias oldest and most
famousnational park

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