Blogs: Smallholders

Having been exposed to the palm oil industry for nearly half a year during this internship, I have witnessed both sides of the debate on palm oil, and one of the most vocal contenders for this ubiquitous ingredient is Malaysian Minister of Primary Industries, Teresa Kok. She has admitted that changing the bad rap of the vegetable oil has been one of her toughest challenges yet and I was interested to know how she would respond to the ongoing pressure from Europe’s banning of palm biodiesel, a move that will wreak havoc in the region I call home.

My curiosity was sated when I had the opportunity to attend the Singapore Institute of International Affairs (SIIA) 6^th Singapore Dialogue on Sustainable World Resources in May, where Teresa Kok was a speaker, to understand the varying focus areas different stakeholders had on sustainability in ASEAN. Themed “ASEAN’s Pathway to Sustainability: Targets for 2020 and Beyond”, the dialogue was a reality check for attendees on ASEAN’s progress towards its 2020 sustainability targets, and the plans beyond this deadline.

Progress worth celebrating

With our media feeds dominated by negative press, it is easy to forget how much progress the commodities sector, palm oil in particular given the ASEAN context, has made towards greater sustainability for both the environment and the livelihoods of the communities that depend on the industry.

For example, Rod Taylor, Global Forests Director at the World Resources Institute (WRI) Indonesia shared that Indonesia has seen a decrease in forest cover loss for the second consecutive year and SIIA reported that the number of hotspots has plunged by more than 90 percent since the haze episode in 2015. This was no coincidence, and the WRI attributed part of the success to the issuing, complying, and enforcing of Indonesia’s legally binding 2016 Peat Moratorium. It aims to reduce forest fires and Indonesia’s greenhouse gas emissions by limiting activities that degrade peat and instructing companies to restore degraded peatland.

This development is telling – that we need to push sustainability efforts to greater heights after witnessing the promising results and vast possibilities from collaboration and dedication to the cause.

A reality check moving forward

However, stakeholders still need to correct the stigmatisation of the sector. Scrolling through my media feed these days, I see posts criticising palm oil, with many who seemingly echo their disapproval because it is the popular thing to do. While these posts may seem harmless, it is jeopardising the livelihoods of millions who depend on palm oil for economic survival.

As Teresa Kok stressed during her keynote address, ASEAN countries need to show solidarity and “be supportive of one another“, especially when the European Union can present a united front against palm oil. She urged the region’s leaders to also band together against “unfair and discriminatory judgments” to protect the financial stability of their own residents.

Indeed, boycotts on palm oil hurt the environment and communities while perpetuating falsehoods about the industry. Ironically, this mindset harms the very cause they are rallying behind as these bans force consumers to turn to less productive vegetable oils.

As an environmentalist, I understand the knee-jerk reaction to the notoriously environmentally damaging industry. However, as my knowledge grew from my undergraduate studies and my internship, I came to realise that reflexive anger and dramatic boycotts do not solve the problem. After all, we sadly still do witness environmental degradation.

So how can we start leading the industry away from its polluting past? As cliché as it sounds, education is critical. Only with more accurate information of the crop and sustainability efforts as a whole, can we better make informed decisions and engage in debates that are more productive for our cause.

Smallholder support is essential

While the education of consumers and authorities is important, so is the involvement of smallholders. As Franky Oesman Widjaja, Chairman and CEO of Golden Agri-Resources (GAR) shared, while it is comparatively easier for large companies to invest in sustainability, smallholders struggle to do the same. This is because smallholders might not have the financial resources necessary or do not see the immediate benefits of changing their practices and as such, are hesitant to do so.

Therefore, it is imperative to first, help these smallholders achieve better yields and profits. Once they have secured financial stability, farmers will be much more open to adopting sustainable practices. Not only that, the added economic benefit can offset the costs of achieving sustainable certifications, making them more financially accessible. When markets acknowledge these responsible sources of palm oil, this will further incentivise other smallholders to operate sustainably, creating a positive domino effect.

Recognising the benefits of financially supporting smallholders, GAR has implemented the Innovative Financing Scheme, which helps farmers access financial aid and training to boost their yields and profits while they go through the expensive (but highly beneficial in the long-term) process of replacing poor quality seeds with higher productive seeds from GAR.  Initiatives such as encouraging farmers to form cooperatives to secure long-term supply contracts with GAR’s supplier mills, and increasing access to certification (Indonesian Sustainable Palm Oil System), help farmers achieve greater financial stability while producing certified sustainable palm oil.

The farmers are ultimately human, and it is natural for them to place their needs over sustainability goals. Therefore, it is essential for us to exercise greater understanding to truly transform the industry permanently.

Celebrating the short-term wins this past year is one thing, but making sure we see real change year-on-year is another. I for one, am feeling hopeful about the sustainability developments; the road ahead may be long and challenging, but if the promising results so far say anything, it is that by working together, ASEAN countries can achieve better progress.