Palm Oil: How Greenies Threaten Jobs and Food Security

The Malaysian palm oil industry earned a healthy RM60 billion last year. This was an increase of RM 10 billion compared to 2009. Most plantation companies doubled their last quarterly profits compared to the previous year. The income generated by high prices as experienced by the palm oil industry led to rural townships around the country undergoing a mini economic boom. Clearly, the rural population benefited the most from the high prices of palm oil, rubber, cocoa and even pepper which form the major plantation commodities produced in Malaysia.
 

The economic contribution of palm oil and other plantation commodities provided the assurance of a remunerative source of income and unlimited employment opportunities throughout the year for the people of Malaysia. A day’s work of harvesting oil palm fruits or tapping rubber trees for latex can provide a person with an income of more than US $30. In a country where two meals per day would cost only US $4, such an income is rather remunerative. Nobody should be deprived of a better life or even resort to begging as long as he or she is willing to put in a few hours of work in a day in our oil palm or rubber plantations. Malaysia enjoys almost full employment which also means that labour shortages exist especially in the plantation sector.

Critical Role of Palm Oil in Enhancing Food Security

The world population is estimated at 6.8 billion today. This is predicted to increase to 8 billion people in 2030 and 8.9 billion by 2050. There will be many more mouths to feed perpetually in the future thereby increasing the demand for food.

Over 1 billion, or 15% of the world still do not have enough food on a regular basis. At the turn of this century, United Nations expounded eight Millennium Development Goals. On top of the list is the goal to eradicate extreme poverty and hunger. The need to address this important issue was echoed, not too long ago, at the World Summit on Food Security that was held in Rome, Italy in November 2009. Very recently, in April 2010, World Bank launched the Global Agriculture and Food Security Program (GAFSP), which is a new multi-donor trust fund to improve food security and incomes in low-income countries through assistance to agriculture.

Deforestation Moratorium and Future Shortages of Food Supply Will Require 10 Times More Forest Conversion

The world population of over 6 billion is increasing by 70 to 80 million people annually. Food supply needs to expand to keep up with the additional demand. Land to grow food crops is getting scarce. By 2020, arable land in the world is projected to decrease to less than 1 acre per capita which is hardly sufficient considering the same land is needed for producing enough grains, vegetables, fruits, meat, milk and oils and fats to feed a single person and his animals for a year. In terms of land utilization, priority will of course be given to the production of cereals and grains as these are staples in most countries and this will be followed closely by oils and fats production.

In the oils and fats sector, global demand is increasing at a rate of 5 to 6 million tonnes per year on average against a total consumption of 165 million tonnes annually. To produce an additional 5 million tonnes of vegetable oils and fats, 10 million hectares of land will be required to plant soyabean, as compared to 1 million hectares if oil palm is the choice. Cereals and grains such as rice, wheat and corn are also experiencing shortages due to population pressure and increasing affluence where more demand for meat will mean more intensive production of grains as feed for cattle etc. The world is facing an enormous challenge. It needs to have 10 million hectares of new land created every year to supply the additional 5 million tonnes of soyabean oil, considering additional land is also needed for grain and cereal production. The annual expansion of oilseed area if planted with soyabean is almost equivalent to the combined total oil palm area of Malaysia and Indonesia. Another 10 million hectares will be needed the following year and similarly, in subsequent years to maintain an additional 5 million tonnes of oils and fats supply annually. BUT if oil palm were to supply the annual increase, the land expansion is more modest, a mere 1 million hectares per year.