Putting the facts in a table ...

Hey followers!! I hope you are all experts now on palm oil since reading my table! I thought in todays post I would give you a little insight into how I went about composing the table for you readers!


Simplifying the complex range of benefits and costs in the categories of social, economic and environmental was provoked by searching for a suitable table to post within this blog and not having much luck!! I embarked on finding journals with the help of google scholar and my university e-journal search facility, so that I could compose a table of my own. Through the time I spent in Borneo and the modules I have studied at university, I had an initial understanding of the main impacts palm oil was having on a social and environmental level, therefore I began my search with addressing issues of biodiversity, livelihoods and the release of carbon from drained peatlands. The articles I found regarding these issues, raised a vast number of other benefits and problems, provoking me to think about other aspects within these categories. In turn this led me to a wider range of literature,  encompassing facts and figures surrounding the impacts of palm oil, particularly its economic benefits and losses.

In addition to the searches I carried out, I have a keen interest in commodities and are hoping to secure a graduate commodity trading position and therefore regularly follow changes in demand for different commodities. By doing so, I am aware of the economic importance of palm oil as a commodity and the scale at which is traded from week to week.

I hope this gave you a little more insight into the how and why of composing the table below!

Tables Up!!

Here is a table I synthesised to make everything a lot more clearer for all you reader out there!! It took me a very long time to read and digest all the articles and then organise them into some sort of comprehendible format, so please appreciate it!! :-) Feel free to comment on this post if you would like any further information on any of the points raised!!

	BENEFITS	COSTS
Social	o   Provides employment for local communities ·      Few other economic options for locals eking a living off rubber cultivation, subsistence rice farming, and fruit gardens	o   Small plantation owners commonly become completely dependant on the large agricultural firms that dominate the palm oil industry ·      Eager community members acquire 2-3ha of land, from large firms and borrow money (approx $3000-6000) to buy seedlings and fertilizers.  However, the oil palm does not bare fruit for 7 years and therefore locals have a low level of income. ·      This combined with the large start-up costs and high interest payments of approximately 30% virtually ensures that small holders will be perpetually indebted to the oil palm company. ·      Dr Lisa Curran who has carried out a number of studies into the impact of palm oil in Borneo suggests that this has profound psychological impact on communities.
Economic	o   Higher yields than other crops leading to increased profits: ·      2.8 tons per hectare, on average. ·      Seven times soybean yield o   Palm oil has the ability to generate much needed foreign exchange ·      Increasing the value of the currency ·      Encouraging foreign direct  investment (FDI) o   The industry is labour-intensive and can provide employment opportunities for locals who may have lost their jobs in diminishing sectors. o   Crude palm oil is a strategic commodity that is the most widely traded edible oil, accounting for more than half of foreign trade in edible oils. In turn creating huge potential for economic growth within host countries  ·      Versatile nature of palm oil makes it practically attractive to food processors ·      A decade ago, palm oil generated more than $2.1 billion in export revenues for Indonesia and more than $3.8 billion for Malaysia, these figures have hugely risen since then	o   Unnecessary expenditure in the instance of food shortages that require the import of food. ·      The attraction of palm oil has not only led to extensive deforestation but also has provoked the conversion of land from producing food crops to producing energy crops, in some cases leading to food shortages ·      Imported food from other regions tends to be far more expensive than local produce. ·      Puts food security under severe threat   o   Host countries could not benefit from the revenue generated from the palm oil if it leaves the country ·      If governments do not implement tight regulations and keep the large agricultural firms under a close watch, revenue may disappear out of the country to another, through foreign owners or affiliation the company may have. ·      Host countries experience all the negatives impacts of palm oil and reap little benefits.
Environmental	o   The use of palm oil as bioenergy is generally regarded as environmentally friendly ·      Regarded as CO2 neutral ·      Saves fossil raw materials, since it substitutes fossil energy sources.	The majority of negative environmental factors occur as a consequence of the deforestation palm oil plantations cause. o   Shifts in biodiversity: ·      Sumatra: Less than 10% of birds and mammals found in primary forests live in plantations ·      Thailand: Only 41 out of 108 birds of the near by rainforest inhabit plantations  o   Contributes to Sumatran and Bornean Orangutan Extinction: ·      Orangutans depend on tropical forests for food and nesting sites ·      Degraded habitats lead to Orangutans migrating to less suitable areas. As a result the death rate increases and the birth rate falls  o   Land use change contributes to climate change in a number of ways. ·      Most simply virgin forests sequester large volumes of CO2. Deforestation leads to less trees standing, therefore reducing the earth natural ability to sequester CO2. ·      Oil palm plantation store significantly less carbon than forest areas prior to conversion. ·      Slash and burn, is commonly used to convert rainforest into fields suitable for palm oil plantations. Through the act of burning, high volumes of CO2 are released into the atmosphere, once again contributing to climate change. ·      As locals protest, against the destruction of virgin forests, large numbers of South East Asia peatlands are being drained to convert into plantations. Peatlands emit CH4 and sequester carbon. Once drained, the carbon stored within the peatlands becomes oxidized and is released into the atmosphere adding further to climate change.  In addition to this, drained peatlands are highly flammable due to the high volume of partially decomposed matter it consists of. If fires break out, just like the slash and burn technique, an even greater volume of greenhouse gases is released into the atmosphere. ·      Draining  peatland hugely increases the fire risk.  If forest fires transpire, further damage would occur to ecosystems and through combustion further CO2 would be released.

So..... What is Palm Oil??

Fruit of Elaeis guineensis                                  Source 

Palm oil is derived from the fruit of the Oil Palm (Elaeis guineensis), a native West African tree. Despite its origin, Elaeis guineensis plantations can be found in a variety of global locations and covers over 13 million ha worldwide. The expansion of the palm oil industry has lead to plantations primarily being located in Southeast Asia, where they have directly or indirectly replaced tropical rainforest. 


Indonesia and Malaysia have become the dominated producers and exports of palm oil, largely because  oil palm thrive under the tropical climate, characterised by all-year round temperatures ranging from 25 to 33 degrees and an average rainfall of 2000mm. Although countries located within 10 degrees latitude of the equator are suitable for palm oil cultivation, they tend to experience several months of drought that severely impacts on crop yield.

Source: Malaysian Palm Oil Board

The entire fruit of the Elaeis guineensis is of commercial use, with palm oil being extracted from its pulp and palm kernel oil from its seed. Consequently providing a higher yield of oil per hectare than most other crops.

In addition to being a high yield crop, palm oil is very versatile, leading to wide use in a large variety of products. Its low acid content facilitates use within food products such as margarine and other edible fats, biscuits and pastry, ice cream and chocolate. In turn, making it the most widely traded edible oil, accounting for more than half of foreign trade in edible oils. In regard to manufactured goods, palm oil regularly appears as an ingredient in many soaps, detergents and cosmetics! So beware you are likely to be supporting the palm oil industry, completely unwillingly!!

As much of Southeast Asia continues to develop, demand from countries such as China and India are increasing, as well as global demand for palm oil as a biofuel, both these factors driving a rapid expansion in the palm oil industry. A study by Colchester et al. (2006), into the implications of palm oil for local communities predicts this expansion could be as much as 4% a year with demand for palm oil set to double by 2020.

With its wide use and increasing demand banning palm oil cultivation on the premise of negative impacts on social, economic and environmental factors, is blindly ridiculous! However there is a desperate need for a shift towards sustainable plantations to secure a higher level of socio-economic development within the host country and reduce the negative impacts palm oil is having on climate change.

Now we have established its origin, what it is used for, as well as recognising that there is a need for sustainable development within the industry. However what hasn’t been addressed (and will be addressed in the next post!!!) is the actual impacts that the industry generates.

Introduction

Fundamentally this blog will explore the impacts of utilising the rainforest for other ecosystem services, with a strong focus on palm oil plantations. It aims to address the opportunity cost of developing virgin forest for economic gain, on both the local indigenous communities and the overall environment, especially in regard to climate change. However, before launching into the topic, I would like to give you a brief insight into the reasoning behind starting ‘Palming Off the Earth’.

Last August a friend and I volunteered as conservationists assisting an indigenous community of the Borneo Rainforest, on a hugely worthwhile afforestation project. The project aimed through the collection and cultivation of trees seedlings to replant areas of rainforest, which were once lost to palm oil plantations. Palm oil companies have now deemed these plantations unsuitable for further production, giving rise to an opportunity to create secondary forest. By living within the local community of Batu Puteh and making various journeys down the Kinabatangan River, I was able to appreciate first hand the extensive damage but also the economic benefit that the Palm Oil industry has caused within the region. From my experience in Borneo I believe that palm oil plantations will continue to be prevalent throughout Indonesia and Malaysia and may begin to appear more frequently in other less renowned regions. Therefore, throughout this blog I would like to build on my experience and investigate in greater depth not only the impacts I encountered but also literature surrounding larger issues, such as influences on climate change.

Here is a 20 minute introductory video that raises some of the issue surrounding palm oil, particularly focusing on the social aspects. If you have time do have a look and any comments on this blog are welcomed!!