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A government’s perspective

In this article, we look at the palm oil production industry from the perspective of the Malaysian government.
© EIT Food

The government of Malaysia considers its significant investment in palm oil over the past 40 years to be the backbone of its narrative of successful rural poverty eradication and national socio-economic advancement (Malaysian Palm Oil Council).

Today, the industry directly employs some 650,000 people, and contributes US$21.09 billion to Malaysia’s exports. More than 39 percent of oil palm plantations are owned by small land holders, something the Malaysian authorities take as a sign of the upward mobility that farming palm oil affords to the poorest. Critics, however, take this as a sign of the ungovernability of the sector, where drives to improve sustainable production fail because of the sheer numbers of producers involved and their different farm sizes, and widely varying levels of investment and the sophistication of their farming operations.

Besides its membership of the Roundtable on Sustainable Palm Oil (RSPO – there’s more information on this in the next Step), Malaysia has also an array of influential organisations and bodies representing and lobbying for the industry: there is the Malaysian Palm Oil Association (MPOA), the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Council (MPOC) which all play important roles. The MPOB is the key regulating body that includes active participation and oversight by relevant Malaysian government departments.1

Towards a circular economy

It’s not all about palm oil production for the global markets. Today, both Indonesia and Malaysia are working hard to move towards a ‘circular economy’ in relation to palm oil. They view the industry as a critical source of energy, both for transportation and for electricity generation. Profitable uses have been found for empty fruit bunches, palm fronds, palm fruit peels, and palm kernel shells. With more than 60 million tonnes of Palm Oil Mill Effluent (POME) produced every year, this has become a significant source of energy both for mill operations and for neighbouring communities – who can be provided with consistent and reliable energy. This delivers a valuable new source of revenue to offset the costs of inputs such as labour and fertiliser.

The Government of Malaysia argues that, by implementing a system of methane capture via biogas digestion, the milling part of the palm oil production system can become carbon negative. (Methane capture is achieved by retaining the POME in enclosed facilities so that the emitted gas can be captured and then burned.) In addition to this, the biomass, which has been used for years by palm oil mill operators to fuel their boilers, offers a tremendous opportunity to reduce emissions by replacing coal in power plants. With approximately 80 million tonnes of biomass produced by the Malaysian palm oil industry per year, 2 harnessing its value has the potential to decrease emissions and improve the livelihoods of the people living close to the mills by reducing the costs of energy that would otherwise have involved the burning of timber-based biofuels (wood and charcoal) or fossil fuels like coal.

Investigate

Identify a country where palm oil is grown and find out what policies and legislation its government has in place to mitigate the environmental and social impacts. Are they widely advertised and do you think they are effective? Please share your findings in the comments section and say which country you are talking about.

References

1) Cramb RA, McCarthy JF, Pye O. 13. In: The Oil Palm Complex: Smallholders, agribusiness and the state in Indonesia and Malaysia. Singapore: NUS Press, National University of Singapore; 2016. p. 409–41.

2) 1. Norrrahim MNF, Farid MAA, Lawal AA, Yasim-Anuar TAT, Samsudin MH, Zulkifli AA. Emerging technologies for value-added use of oil palm biomass [Internet]. RSC; 2022 [cited 2023 Dec 21]. Available from: https://pubs.rsc.org/en/content/articlelanding/2022/va/d2va00029f. Free access version: https://pubs.rsc.org/en/content/articlehtml/2022/va/d2va00029f

© EIT Food
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Engaging with Controversies in the Food System: Palm Oil

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